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Survey finds 20% of companies with 300 employees or more refrain from raising wages and make efforts to reduce labor market gaps

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Feb. 8, 2017

 

The Ministry of Employment and Labor (MOEL) conducted a survey of companies with 300 employees or more which had concluded wage negotiations in 2016. As a result, it was found that 301 or 18.8% of the companies surveyed  had refrained from raising wages and made efforts to reduce labor market gaps  with the money saved as a result.

 

* Of 2,529 companies with 300 employees or more to which MOEL had provided guidance on wage setting, 1,599 responded to the survey, excluding those that failed either to conclude wage negotiations or to submit their responses.

 

MOEL has provided on-site guidance to large companies with 300 employee or more which are subject to intensive guidance. The survey carried out this time also targeted such companies.

 

* The top 10% of all permanent workers earned an average of 68.04 million won and the top 10% of permanent workers in companies with 300 employees or more earned an average of 103.464 million won (Survey on Labor Conditions by Employment Type, Jun. 2015).

 

Of the 1,599 companies in the survey, 543 (34.0%) answered that they had refrained from wage increases.

 

And of the 543 companies which had refrained from wage increases, 301 (55.4%) answered that they had spent the money saved as a result to reduce labor market gaps*.

 

* The survey asked respondents to choose the areas on which they spent the freed-up money among the following answers: ① hiring new employees, ② improving the working conditions of non-regular workers, ③ improving the welfare and working conditions of suppliers' workers, ④ paying higher prices to suppliers or making investments to improve suppliers' competitiveness, ⑤ making contributions into the win-win cooperation fund, the employee welfare fund, the joint labor welfare fund, etc., and ⑥ funding business activities. (multiple responses allowed) → Only those that selected answers ①~⑤ were considered to have made efforts to address labor market gaps (excluding companies which used the freed-up money to fund business activities).

 

Among the companies which refrained from raising wages, the largest proportion (40.9%) spent the money freed up as a result on 'hiring new employees', which was followed by 'improving the working conditions of non-regular workers' (16.0%), 'improving the welfare and working conditions of suppliers' workers' (7.6%), 'making contributions into the win-win cooperation fund, the employee welfare fund, the joint labor welfare fund, etc.'(5.5%) and 'paying higher prices to suppliers or making investments to improve suppliers' competitiveness' (5.3%).

 

It is worth noticing that the participation rate was higher among unionized companies than non-unionized ones.

 

* Of unionized companies, 36.7% refrained from wage increases while 31.7% of non-unionized companies did so.

 

* Of unionized companies, 20.9% refrained from wage increases and made efforts to reduce labor market gaps while 17.2% of non-unionized companies did so.

 

The grand tripartite agreement reached on September 15th 2015 contains a promise to refrain from wage increases and thereby hire young people and improve the working conditions of non-regular workers and suppliers' workers.

 

<Related provisions of the grade tripartite agreement>

▪Executives and employees in the top 10% of wage earners will refrain from wage increases and their companies will hire more youth and improve the working conditions of non-regular workers and suppliers' workers, using the money freed up as a result and the corresponding contributions they make in return.

 

"In 2016, despite the bad economic conditions and bumpy industrial relations, including FKTU's withdrawal from the Economic and Social Development Commission and the restructuring of the shipbuilding industry, workplaces'  efforts to reduce labor market gaps according to the intent of the grand tripartite agreement continued without interruption. In particular, the fact that the proportion of workplaces making such efforts was higher among unionized companies has great significance." said Jeong Ji-won, the Director-General of the Labor-Management Cooperation Policy Bureau.

 

"The government will enhance communication with employers' and workers' organizations and upgrade its support programs to ensure that such efforts by large companies to reduce labor market gaps can spread further afield."

Last Modifide Date   :   Thu March 23, 2017
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