[Exclusive] January Wage Arrears 'Record High'... Growing Warning Signs Amid Economic Downturn

Unpaid Wages in January Reach 279 Billion KRW
Up 6.14% Year-on-Year... Upward Trend Continues
Transportation, Warehousing, and Telecommunications Sector Rises to Second Place
Impact of Carry-Over of Unsettled Wages from Last Year
Cumulative Unpaid Wages for January-February Reach 431.5 Billion KRW
"Supervisory Administration Should Shift to Prevention-Oriented Approach"

In January, the amount of unpaid wages surpassed 279 billion KRW, marking the highest ever for that month. Following the record-breaking unpaid wages in January last year, the upward trend continued this year. In particular, due to the aftermath of the Tmon and Wemakeprice (Timep) incident last year, unpaid wages in the transportation, warehousing, and telecommunications sectors nearly tripled. As concerns about an economic downturn grow this year, voices expressing worry about the potential increase in unpaid wages are emerging.

As consumer payment cancellations related to Tmon and Wemakeprice, payment gateway (PG) companies for card companies, begin in earnest, refunds are expected to be processed sequentially starting as early as the 1st. On this day, a dedicated counter for victims of the delayed settlement of sales proceeds from Wemakeprice and Tmon has been set up at the Financial Support Center of the Financial Supervisory Service in Yeouido, Seoul. Photo by Jo Yongjun jun21@

According to the '2021-2025 Five-Year January Industry-Specific Unpaid Wage Report Statistics' received on the 28th by the office of Representative Lee Yong-woo (Democratic Party) of the National Assembly's Environment and Labor Committee from the Ministry of Employment and Labor, the amount of unpaid wages in January reached 279.033 billion KRW, a 6.14% increase compared to the same month last year.

This is the largest amount ever recorded for January. It broke the previous record set in January last year (262.892 billion KRW), setting a new record within a year. The amount of unpaid wages in January has been increasing for three consecutive years since 2023 (7.96%), with a sharp rise of 64.11% last year.

The number of workers who experienced unpaid wages in January was 29,173, a 15.07% decrease compared to the same month last year (34,348). The average unpaid wage per person, calculated by dividing the total unpaid wages by the number of affected workers, increased by 24.97% during the same period, from approximately 7.65 million KRW to 9.56 million KRW.

By industry, unpaid wages in the transportation, warehousing, and telecommunications sector surged sharply by 192.63%, from 23.093 billion KRW in January last year to 67.578 billion KRW this January, drawing a steep upward curve. This caused changes in the ranking of industries with the highest unpaid wages, which had been manufacturing, construction, and wholesale & accommodation services in order.

In January, the unpaid wages were highest in manufacturing (71.066 billion KRW), followed by transportation, warehousing, and telecommunications, construction (51.099 billion KRW), and wholesale & accommodation services (27.194 billion KRW). In January last year, the amounts were largest in manufacturing (73.842 billion KRW), construction (59.522 billion KRW), and wholesale & accommodation services (30.622 billion KRW).

The sharp increase in unpaid wages in the transportation, warehousing, and telecommunications sector is attributed to the Timep incident. In July last year, as the Timep issue escalated, large-scale collective unpaid wages occurred at the parent company Qoo10 (32 billion KRW) and others. Although legal actions were taken afterward, unpaid wages that have not yet been settled were carried over into this year, causing the figures to surge.

The cumulative amount of unpaid wages this year, including last month, reached 431.5 billion KRW. The number of affected workers was recorded at 5,297. Although the amount of unpaid wages slightly decreased compared to the same period last year (433.2 billion KRW), concerns are growing due to the ongoing bleak economic outlook.

Professor Kang Sung-jin of Korea University’s Department of Economics said, "The economic growth rate this year is expected to be lower than last year, and domestic demand is sluggish, so there is a high possibility that unpaid wages will increase further this year. The government should strengthen the social safety net and expand related support for workers facing difficulties."

Representative Lee emphasized, "As the record for unpaid wages is broken every year, the government needs to feel a sense of crisis. With determination, shifting from a reactive administrative approach to a preventive supervisory administration is essential to fundamentally prevent unpaid wages."

Last year, the amount of unpaid wages increased by 14.6% compared to the previous year, reaching 2.0448 trillion KRW. Due to the economic downturn in sectors such as construction, several large-scale collective unpaid wage incidents occurred, pushing the total over 2 trillion KRW for the first time and marking the largest scale ever recorded. The number of workers affected by unpaid wages that year was 283,212, a 2.8% increase.