Korea Employers Federation: "Wage Levels in Korean Finance and Insurance Sectors Higher than EU and Japan"

[Asia Economy Reporter Kiho Sung] On the 6th, the Korea Employers Federation announced the 'International Comparison of Wage Levels by Industry among Korea, Japan, and the European Union (EU).' According to the survey, industries such as 'Finance and Insurance' and 'Information and Communication,' including the IT sector, were classified as high-wage industries, while the accommodation and food service industry was found to have the lowest wage levels common to Korea, Japan, and the EU.

Additionally, the wage gap between the highest and lowest paying industries was the largest in Korea among the three regions, highlighting a pronounced polarization of wages by industry.

Looking at the wage differences, although there are ranking differences by country, the relatively high value-added industries?Finance and Insurance, Professional, Scientific and Technical Services (including professionals such as lawyers and accountants, as well as scientific researchers and developers), and Information and Communication (including specialized IT personnel such as software developers)?were the top three high-wage industries common to Korea, Japan, and the EU. Conversely, the accommodation and food service industry was the lowest paying industry in all compared countries.

By country, the total monthly wages in the three industries of Finance and Insurance, Wholesale and Retail Trade, and Construction were highest in Korea compared to the same industries in Japan and the EU, while wages in the accommodation and food service industry were the lowest among the compared countries.

On the other hand, the wage gap between industries was the largest in Korea regardless of exchange rates. Assuming the wage of the highest paying industry in each country as '100,' the wage level of the accommodation and food service industry (the lowest paying industry in all compared countries) was '36.7' in Korea, showing the largest gap, followed by the EU at '41.4' and Japan at '55.5.' The wage gap between the first and second highest paying industries was also the largest in Korea among the compared countries.

The total monthly wages of workers across all industries (excluding overtime pay) in Korea, Japan, and the EU, based on purchasing power parity exchange rates, were $4,478.7 in Korea, similar to the EU average of 15 countries at $4,534.5, and significantly higher than Japan's $3,785.8.

Furthermore, the average wage level across all industries relative to GDP per capita was 118.5% in Korea, 107.0% in Japan, and 91.7% in the EU (simple average of 15 countries), indicating that Korea has the highest wage level reflecting each country's economic level.

Meanwhile, comparing wages by industry relative to GDP per capita, Korea's Finance and Insurance industry stood out at 195.0%, significantly higher than Japan's 135.9% and the EU's 137.8%. All three top wage industries in Korea showed the highest wage levels when considering economic levels.

Ha Sang-woo, head of the Economic Research Division at the Korea Employers Federation, stated, “Wage levels reflecting economic levels were found to be higher in Korea than in competing regions such as the EU and Japan. In particular, Korea's Finance and Insurance industry showed the highest wage levels among all industries across Korea, Japan, and the EU, which is presumed to be the result of a seniority-based wage system and the strong influence of labor unions.” He added, “Although not analyzed due to data limitations, considering Korea's excessive wage disparities by company size, wages in large corporations within high-wage industries are likely to be very high compared to advanced countries.”

Additionally, Mr. Ha emphasized, “Excessive wage increases beyond productivity can undermine the global industrial competitiveness of companies and lead to social conflicts such as worsening wage polarization. Therefore, it is crucial to establish fairer and more rational wage adjustment standards in our labor market.”

This content was produced with the assistance of AI translation services.