KEF Research on 2011 Wage AdjustmentThe agreed wage hike of this year is 5.4%, and the starting salary for new university graduate recruits stands at 2,422,000 KRW per month. The wage increase rate reached the highest since 2007, due to the high expectation on economic recovery in the first half of 2011, and following inflation which led to more demand of workers to secure cost of living.
KEF Research on 2011 Wage Adjustment4-year university graduates receive 2,422,000 KRW per month
According to『Research on 2011 Wage Adjustment』conducted by the Korea Employers Federation on 764 companies with more than 100 employees, the average starting salary for new university graduate recruits stands at 2,422,000 KRW per month.
By company size, large enterprises with over 1,000 employees pay the highest salary, 2,716,000 KRW per month, showing 590,000 KRW more than SMEs (2,126,000 KRW).
By industry, finance and insurance companies offer the highest salary of 2,929,000 KRW, which is 505,000KRW higher than manufacturing industry (2,424,000 KRW), and 568,000 KRW higher than construction industry (2,361,000 KRW).
Meanwhile, the starting wages for high school graduates to university graduates in manufacturing industries tend to increase after 2008. The percentage increased from 78.6% in 2008 to 81.4% in 2011. The increase rate of high school graduates’ starting wages in manufacturing industries this year is 6.0%, which is 0.6%p higher than that of university graduates (5.4%).
Spread of pragmatism in labor movement, brought faster wage negotiation and higher wage increase rate
Despite many negative factors on business environment such as the global fiscal crisis, Korean enterprises brought 5.4% of agreed wage hike, which is the highest since 2007(5.1%).
Economic recovery in the first half of 2011 and demand for wage hike led by inflation were pointed out as the main reasons for high wage increase rate. Also, the changeover of labor movements from strife to pragmatism played an important role.
65.6% of companies that concluded wage negotiation answered that it took shorter time to negotiate than the last year. ‘Affirmative labor-management attitude to negotiate(44.5%)’ was pointed out for the main factor of faster pay settlement, followed by ‘workers’ better understanding of business environment(25.1%).’
The periods and number of negotiations for wage settlement are also decreased. The average number of labor-management negotiation for wage hike is 5.3, and the period is 1.8 months. The KEF considered these figures are considerably decreased compared to the last year (6.1 times, 2.2 months).
Effect of multiple unions system on pay settlement differs among companies
16.2% of the companies answered that multiple unions system introduced in July 2011 affected wage negotiation. However, the effect differs among companies. 9.8% of the companies said multiple unions system led to faster pay settlement, whereas 6.4% of the companies said that they failed to make an agreement.
The differences are from that companies with faster pay settlement had hurried to make an agreement before the introduction of multiple unions system, while companies with a delay had difficulties to make an agreement due to struggles such as making single bargaining channel.
16.6% of the companies mentioned that they made ‘excessive salary increases’ regarding the wage adjustment 2011. ‘Wage comparison to other companies (39.5%),’ ‘low increase in the past(24.4%),’ and ‘trade unions’ strong demand(19.8%)’ were listed as reasons for excessive wage hike.