Mitigate Grows Since 2020
Wage inequality, which had been showing a easing trend, has deepened again since 2020. The increase in elderly and female workers, especially in low-wage jobs, has been pointed out as a cause.
Low-wage groups show low wage growth rates, while high-wage groups show high wage growth rates... "Widening gap"
According to the Employment Trend Brief "Recent Characteristics and Causes of Wage Gaps" report by the Korea Employment Information Service on the 15th, the analysis used data from the Ministry of Employment and Labor's Employment Status Survey by employment type to examine hourly wage gap trends from 2008 to 2022.
Until 2020, wage gaps appeared to be easing, but since then, the gap between high-wage and low-wage groups has turned toward widening.
The Gini coefficient, which quantifies the degree of inequality in hourly wages, decreased from 0.349 in 2018 to 0.325 in 2020, then increased to 0.327 in 2021 and 0.332 in 2022.
The Gini coefficient indicates equality when closer to 0 and inequality when closer to 1.
Also, when dividing wages into 10 deciles with the lowest wages as the 1st decile and the highest wages as the 10th decile, and comparing hourly wages converted to real wages, the hourly wage increase from 2020 to 2022 was smallest in the 1st decile and largest in the 9th and 10th deciles.
The average hourly wage in the 1st decile rose by 2.9% from 8,807 KRW in 2020 to 9,062 KRW in 2022, while the 9th decile wage increased by 11.2% from 29,317 KRW to 31,933 KRW.
In other words, since 2020, wages for low-wage workers have risen much less than those for high-wage workers, widening the wage gap.
Causes identified as 'Increase in wage inequality among those aged 50 and over and rise in proportion of female workers in low-wage groups'
The report cited changes in population distribution and increases in female and elderly workers as reasons for the widening wage gap.
By age group, the 50s, which include a mix of continuous, retired, and re-employed workers, are particularly characterized by severe wage inequality. Recently, the proportion of workers aged 50 and over has increased in the overall workforce distribution, leading to greater overall inequality.
The increase in the proportion of elderly and female workers in the low-wage group also limited wage growth in that group, further widening the gap.
Looking at low-wage workers by age, all age groups under 49 decreased in number from 2020 to 2022, while all age groups 50 and over increased.
In particular, the number of low-wage workers aged 65 and over increased by 25.3% during this period (men 18.3%, women 36.0%).
Jang Sarang, a senior researcher at the Korea Employment Information Service, analyzed, "The recent widening of the wage gap is due to the strengthening of 'wage polarization' caused by changes in labor supply and demand structures," adding, "The main cause is the activation of labor market participation among the elderly, which has led to the proliferation of low-wage jobs."
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