Wage increases average 5 percent in 2008: ministry

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By Tony Chang
SEOUL, Jan. 7 (Yonhap) -- South Korean businesses and unions agreed to increase
wages by an average of 5 percent in 2008, slightly more than the year prior, the
government said on Wednesday.
A recent survey of 6,745 companies who have over 100 employees showed that their
management and unions agreed to raise wages by an average of 4.9 percent last
year, up from 4.8 percent in 2007, the Ministry of Labor said.
The survey did not ask respondents, however, whether the raises were adjusted to
take into account inflation and higher cost of living. In 2008, average consumer
prices grew 4.7 percent, much higher than the 2.5 percent increase seen a year
earlier, according to the National Statistical Office.
Wages recorded minus growth in the late 1990s due to the Asian financial crisis.
They grew annually by 6-7 percent in the early 2000s but dipped to around
4-percent annual growth beginning in 2005.
The retail industry saw the largest payment increases this year with average
raises of 6 percent, followed by manufacturing and media-related industries at
5.4 percent and 4.4 percent, respectively.
The rate of wage deal settlements reached 84 percent, up 7.5 percentage points
from 2007, while the number of companies agreeing on cooperative labor relations
more than tripled to 2,678, the ministry said.
The number of companies that agreed to cut or freeze wages, however, rose sharply
in late 2008, the survey said, citing the increased flexibility on the part of
unions in coping with the economic downturn. The number stood at 45 in October,
but climbed more than sevenfold to 310 in December.
odissy@yna.co.kr
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