Salary Increased but Decreased... Real Wages Reflecting Inflation Down 1.7%

Ministry of Employment Reports Business Workforce Survey
Average Nominal Monthly Wage from Jan to Mar at 4,216,000 KRW
Up 53,000 KRW from Same Period Last Year
Real Wage at 3,711,000 KRW... Down 64,000 KRW

Real wages reflecting the price level in the first quarter of this year decreased by 1.7% compared to the same period last year.

According to the Business Labor Force Survey results announced by the Ministry of Employment and Labor on the 30th, the average monthly nominal wage per worker at businesses with one or more regular employees from January to March this year was 4,216,000 KRW, an increase of 53,000 KRW (1.3%) compared to the same period last year.

However, real wages adjusted for inflation actually decreased by 1.7%. During this period, the Consumer Price Index rose by 3.0%.

The average monthly real wage per worker in the first quarter of this year was 3,711,000 KRW, down 64,000 KRW from 3,775,000 KRW in the first quarter of last year. Looking at March alone, nominal wages increased by 2.9% year-on-year, while real wages decreased by 0.2%.

As the inflation rate continues to outpace wage growth, workers’ real wages have declined for two consecutive years, with decreases of -0.2% in 2022 and -1.1% in 2023.

Earlier, the Household Income and Expenditure Survey released by Statistics Korea also showed that household real income in the first quarter of this year fell by 1.6% compared to a year earlier, marking the largest decline in seven years amid decreasing earned income. Regarding working hours, the average monthly hours worked in the first quarter of this year were 154.8 hours, down 2.8 hours (1.8%) from last year.

Meanwhile, as of the end of April, the total number of employees at businesses with one or more workers was 20,106,000, an increase of 198,000 (1.0%) compared to a year earlier. This was a slightly larger increase than the 184,000 (the smallest increase in three years) recorded in March. Regular employees increased by 0.5%, and temporary and daily workers increased by 4.7%.

By industry, the largest increases were seen in health and social welfare services (3.9%), construction (1.9%), and professional, scientific, and technical services (2.1%), while industries such as accommodation and food services (-1.6%) and education services (-1.0%) saw a decrease in employees.

In manufacturing, which has the largest share of employees, the workforce increased by 8,000. Within manufacturing, the other transportation equipment manufacturing sector, which includes shipbuilding, saw a notable increase of 13,000 employees.

In April, the number of new hires and entrants was 954,000, and the number of separations was 893,000, decreasing by 1.9% and 3.5% respectively compared to the same month last year.

The industries where hiring mainly increased were health and social welfare services, public administration and defense and social security administration, and transportation and warehousing.