August 31, 2022 10:36
The pay gap between big business and smaller companies is widening again after shrinking a little during the coronavirus pandemic.
The main reason seems to be hefty pay rises in large companies with powerful labor unions.
According to a report by the Korea Chamber of Commerce and Industry on Tuesday, the average pay at small and midsize companies with fewer than 300 employees stood at a mere 61.72 percent of bigger firms' last year.
The rate was 60.78 percent in 2019 but rose to 63.29 percent in 2020.
"Right after the outbreak of the pandemic, the pay gap narrowed because conglomerates' bonuses decreased while pay decreased slightly at SMEs thanks to the minimum wage hike," said Yoo Il-ho at the KCCI. "But now the pay gap is widening again as pay raises in conglomerates returned to normal."
Last year, conglomerate wages increased on average by 6.6 percent but at SMEs only 3.9 percent. In the first half of this year, wages rose another 5.4 percent at large companies but only 5.1 percent at smaller ones.
The KCCI predicted that the pay gap will further widen this year, given recent large-scale pay raises at conglomerates and IT firms.
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