South Korea’s real wages slipped by 5.5% due to high inflation

[Image source: Gettyimagesbank]

Inflation-adjusted real wages in South Korea have plummeted since the start of this year increasing the burden on individuals as they struggle with high inflation and interest rates.

The average monthly wage per employee in businesses with more than one full-time staff reached 4.69 million won ($3,619) as of January, down 0.6 percent from 4.72 million won a year ago, according to data from the Ministry of Employment and Labor Thursday. After adjusting inflation, the monthly pay stood at 4.26 million won, a 5.5 percent fall from a year earlier. Real wages recorded a fall for 10 straight months since last April because of the soaring inflation.

Reduced work hours for full-time workers are said to be the reason for the drop in wages. The average number of hours worked per month as of January shrank by 2.9 hours compared with a year earlier, resulting in falling wages. Last year, an average full-time employee worked 158.7 hours a month, 73.7 percent of the legal 52-hour workweek.

Overtime work hours have remained on the decline in Korea. The average number of hours full-time employees worked overtime last year was 8.3 hours per month, unchanged from a year ago. The figure was also 1.2 hours less than 9.5 hours in 2018. However, the monthly overtime pay for full-time workers between 2018 and 2022 rose 11.7 percent to 220,000 won from 197,000 won. “The rise in overtime pay was led by increased wages,” an unnamed official from the Ministry.