The government announced last week it would support employment by slashing the pay of entry-level recruits by up to 30 percent. The plan applies only to people with college degrees at state-run companies. But now the private sector is picking up the strategy.

Management at Korea's top 30 conglomerates agreed on Wednesday to cut as much as 28 percent from the current base salary of newcomers with a college degree. The companies plan to avoid major layoffs of current workers by reducing the pay of new employees and interns. Representatives from Korea's leading corporations said firms that offer annual salaries of more than US$17,000 will be subject to the latest measures. Salaries of up to $20,000 will be cut as much as 7 percent salaries, between $20,000 and $24,000 by up to 14 percent and salaries of more than $24,000 as much as 28 percent.

Both Samsung and LG Group announced they will reduce salaries of new recruits who hold degrees by 5 to 15 percent in all of its affiliates. Samsung's major affiliate Samsung Electronics currently offers close to $19,000 to its rookies, while rival LG Electronics offers more than $20,000. Meanwhile, the country's two big umbrella unions are denouncing the corporate sector's initiative, calling it a strategic move to cut salaries of all employees.

The more aggressive of the two, the Korean Confederation of Trade Unions, expressed concerns over the consequent decline in labor costs. And the Federation of Korean Trade Unions, usually the more tepid of the two, accused corporations of breaching labor agreements. The federation had agreed on Monday with corporate representatives to go along with a so-called job-sharing plan that seeks to avoid layoffs, but the prospect of pay cuts seems to have been too much to swallow.