June 09, 2021 12:24
The hourly wage of bankers now exceeds W50,000, a first for Korea and an alarming sign of growing wealth disparity (US$1=W1,115).
But while paychecks have become fatter, banks are growing less competitive as they insist on maintaining a seniority-based wage system regardless of performance and are being edged out by leaner online companies.
According to the Ministry of Employment and Labor on Tuesday, financial-sector workers earned W7.98 million for 158.6 hours of work a month on average in the first quarter. That boils down to an hourly wage of W50,292, or twice the average pay of all other sectors, which was W24,379, and six times higher than the minimum hourly wage of W8,720.
The financial sector includes banks, insurance companies and brokerages.
Bankers worked about average hours and less than miners (176.2 hours) and manufacturing workers (169.5 hours). Their monthly hours dwindled by 4.5 hours compared to a year ago, but pay increased by about W791,800. That translates into an hourly pay increase of 14.2 percent, the only sector where growth surpassed 10 percent.
But per-capita productivity did not improve. Last year, the per-capita operating profit at KB Kookmin, Shinhan, Hana and Woori banks stood at W175.4 million, down 6.8 percent compared to 2019.
A key gauge of efficiency, the proportion of wages out of selling, general and administrative costs, stood at 64.9 percent in the first quarter and has been rising since 2019. Big foreign banks manage around 50 percent -- HSBC 51.4 percent, JP Morgan 52.5 percent and Citigroup 50.3 percent.
The workforce structure is also a problem. According to the Korea Institute of Finance, the proportion of managerial workers to clerks at domestic banks was 38.5 to 61.5 percent in 1996, before the Asian financial crisis, but rose to an absurdly top-heavy 60.2 to 39.8 in 2008. It has slightly flattened since, but managers still outnumber clerks.
Kim Woo-jin at the institute said, "Domestic financial institutions are facing difficulties in workforce flexibility because of an outdated wage system and fierce union opposition. They need to drop their outdated seniority-based pay scale and adopt performance-based pay."
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