Real Monthly Wage per Worker 3,554,000 KRW
Real Wages Decline for Two Consecutive Years Due to Inflation and Other Factors
Real wages for workers have decreased for two consecutive years. Although nominal wages rose slightly, the increase in prices was greater in comparison. Real wages, which represent the actual value of wages adjusted for inflation, are calculated by dividing the nominal wages received by workers by the consumer price index and then multiplying by 100.
Real wages of workers have decreased for two consecutive years. Although nominal wages rose slightly, the inflation rate was higher in comparison. [Image source=Pixabay]
According to the Business Labor Force Survey results released by the Ministry of Employment and Labor on the 1st, the average monthly nominal wage per worker at businesses with one or more regular employees last year was 3,966,000 KRW, up 2.5% from the previous year (3,869,000 KRW).
However, the average monthly real wage per worker was 3,554,000 KRW, down 1.1% (38,000 KRW) from the previous year (3,592,000 KRW). The consumer price index rose sharply by 3.6%, causing real wages to decline. This survey was conducted on a sample of businesses with fixed workplaces, excluding agriculture and similar sectors, and does not include workers in household service industries without fixed workplaces.
Real wages decreased slightly by 0.2% in 2022, marking the first decline since the statistical criteria were changed in 2012. Moreover, they have fallen for two consecutive years through last year. Although the inflation rate slowed compared to 2022 (5.1%), the wage growth rate also slowed, resulting in a larger decrease in real wages.
Furthermore, narrowing the scope to December of last year, nominal wages also decreased slightly. The total wage per worker at businesses with one or more employees in December was 4,433,000 KRW, 1,000 KRW less than in December 2022.
This was because fixed wages and overtime pay increased compared to the previous year, but special payments such as bonuses decreased by 12.4% compared to December two years ago. Due to the downturn in the semiconductor industry last year, some large companies, including Samsung Electronics’ semiconductor division, set bonuses to zero, significantly reducing special payments. As a result, the total annual special payments for all workers also decreased by 2.9% compared to the previous year.
The Ministry of Employment and Labor explained, “The base effect also played a role, as annual special payments increased significantly by 14.3% in 2021 and 10.4% in 2022.”
Meanwhile, the average monthly working hours per worker as of December last year was 152.8 hours, down 13.8 hours from a year earlier.
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