Income inequality increases over 10 years

By Lee Kyung-min

Income disparities between employees of small- to medium-sized (SME) companies and workers at major companies increased over the past decade, a study showed Sunday.

The income gap between regular and non-regular workers also widened, the study added.

The Korea Labor Institute (KLI) and Statistics Korea, which conducted the study, compared the monthly incomes of employees from companies in both categories.

The SME employees earned some 1.42 million won ($1,266) a month in 2004 and 2.04 million won ($1,800) in 2014, while employees at major companies earned an average of 2.38 million won in 2004 and 3.59 million won in 2014.

In terms of hourly payments, while the former group earned 7,179 won an hour in 2004 and 11,424 won in 2014, the latter category earned 12,311 won in 2004 and 20,397 in 2014.

Disparity between regular workers and non-regular workers widened, the study added.

In 2004, non-regular workers at major companies earned 73 percent of wages paid to regular workers at the same company, and this gap widened with the latter making only 66 percent in 2014.

As for the SME workers, non-regular SME workers earned 78 percent of the regular workers of the same company, and the gap also widened with the latter making only 68 percent in 2014.

SME workers made only half the salary of workers at major companies, the study added.

The study attributed the disparity to company unions protecting their privileges including employee benefits.

“Our labor market is very discriminatory against the size of a company one works at and whether they are regular or non-regular employees. Only a strong government will to reform this status quo will solve this situation,” the study’s author said.