This study provides a quantitative analysis of the factors that determine and affect wages, with an objective of identifying and examining the structure of wage inequality in the Korean manufacturing sector.
In order to perform a detailed analysis of the wage inequality structure in the Korean manufacturing sector, we first need to define the factors that determine manufacturing workers’ wages and their differences; the margin by which the wages differ in relation to each factor; and the policy implications of these wage differences. Considering that Korea’s industrial structure is biased heavily in favor of manufacturing, it is crucial to analyze the wage differences among workers of different age and seniority groups so as to arrive at more effective policy measures for ensuring income stability for all workers.
In Korea, the most reliable indicator of wage differences among manufacturing workers is the duration of a given worker’s service years, or seniority. In many manufacturing fields—textiles, shoes, garments, fashion accessories, leather goods, etc.—in Seoul and central Korea, workers’ wages increase consistently with their seniority. In addition, men also tend to earn more than women. Men make, on average, KRW 390,000 compared to women’s KRW 260,000, a difference of KRW 130,000. This is in part due to the survey group of male workers having worked in their positions longer than their female counterparts. In any given manufacturing industry, men at age 45 or older earn KRW 550,000 a month each on average, while men in their 20s earn around KRW 210,000. Similar wage gaps are noted among female workers as well.
However, in other parts of Korea, the gap between men and women grows even wider in and outside the manufacturing sector, as men tend to predominate the job market in these regions. Men in non-central parts of Korea who have worked in their jobs for 10 consecutive years or longer earn between KRW 1.35 million and KRW 1.42 million per month, while women who have worked in the same jobs for equal amounts of time earn little more than KRW 1 million per month.
The Korean government can help to rectify these income gaps by introducing a system that allows the market itself to determine wage levels based on performance evaluations. In addition, the government needs to increase the number of jobs available for women and adopt other measures for the fair and gender-neutral evaluation of workers’ performance.
Only when the structural income gaps in the manufacturing sector are overcome can Korean industries make more efficient use of available labor, and thereby contribute more effectively to the national capital policy and economic development.
한국 제조업의 임금격차구조(Wage inequality structure in the Korean manufacturing sector)
|Series Title; No||연구보고서 / 제75-15권|
|Subject Country||South Korea(Asia and Pacific)|
|Subject||Economy < Macroeconomics
Industry and Technology < Manufacturing
|Holding||KDI; KDI School|