Korea’s gender pay gap is the world’s worst. Will transparency fix it?

Members of the Korean Women Workers Association perform a symbolic act of breaking through the glass ceiling in downtown Seoul, March 2023. Newsis

Korea holds many firsts. But not all are worth celebrating.

Since joining the OECD in 1996, the country has consistently ranked first among member nations for its gender pay gap.

According to the most recent OECD data from 2023, Korea's gap stood at 29.3 percent— the widest in the organization. It means for every 1 million won ($725.32) earned by a man, a woman earns only 707,000 won. Although the disparity is shrinking, it still far exceeds the OECD average of 11.3 percent.

This is not some obscure or irrelevant fact. A survey conducted by the labor rights group Workplace Gapjil 119 on March 8 — International Women's Day — found that Koreans already consider the gender pay gap the most serious gender-related issue in the workplace.

"I was shocked to learn that a colleague with a lower title and less experience was earning almost the same salary," one respondent said.

Another said, "I've heard people say that women shouldn't be promoted."

Despite public awareness, the root causes of the gap remain difficult to trace. There is no clear statistical framework or government data to accurately identify them. Currently, public disclosures include only the number of male and female employees and the average compensation per person by gender.

To better identify and address structural inequalities, a legal push is underway.

Rep. Shin Chang-sik of the minority liberal Rebuilding Korea Party proposed an amendment on March 18 to introduce a gender pay disclosure system. The proposal gained further political momentum when it was included in President Lee Jae Myung’s campaign pledge on May 16.

The plan would require workplaces with more than 300 employees to disclose gender and employment data broken down by job type, rank, role, years of service and employment status.

In addition, the bill would require the Minister of Employment and Labor to analyze and publicly release detailed reports on gender pay disparities by job type and position, and to formulate annual improvement plans to be submitted to the National Assembly.

Supporters of the system argue that it’s difficult for women to realize they are being paid less than their male colleagues. And even when disparities are identified, proving that it constitutes discrimination is far from easy.

"Without disaggregated data on pay by gender, age and role, inequality remains invisible. Standardized reporting is the foundation of any serious reform," said Benja Stig Fagerland, founder of SHEconomy. "From recruitment to promotion, salary structures must be clear and reviewable."

Yet, reform efforts rarely come without resistance.

The Korea Listed Companies Association stated that while it supports the elimination of gender-based discrimination, requiring such disclosures in business reports contradicts the purpose of the Capital Markets Act.

An association official explained that the law is designed to improve market efficiency through investor protection, and thus, disclosures should be limited to factors directly or indirectly tied to financial decision-making — such as corporate governance, risk factors and financial performance.

Rep. Shin Chang-sik of the minority liberal Rebuilding Korea Party speaks during a press conference introducing an amendment to establish a gender pay disclosure system at the National Assembly in Seoul, March 6. Courtesy of Shin's office

Shin refuted that view. He argued that gender pay disclosure supports investor protection. Gender diversity and wage equity, he said, are increasingly viewed as baseline Environmental, Social and Governance (ESG) standards in global markets.

"It is the gender pay gap itself, not its disclosure, that harms corporate reputation, especially among foreign investors," Shin said.

Pauline Grosjean, an economics professor at the University of New South Wales and the author of "Patriarcapitalisme (patriarchal capitalism)," agreed. She said that it's a proven fact that pay inequities in firms have a negative impact on productivity.

"I'm surprised that not more firms are championing it. It shows how deeply ingrained culturally this is," Grosjean said. "I don't think that Korea is doing anything radical in terms of policies, just bringing yourself up to the level of other international players."

Countries around the world are already implementing gender pay transparency through legally binding measures.

The U.K. and France publish company-level gender pay data online and provide comparable indicators such as gender equality indexes. Germany’s Transparency in Wage Structures Act grants employees the right to request information on gender pay differences. Norway requires companies to conduct annual pay audits, which must explain gender pay gaps and share the findings with employee representatives.

"The burden of proof is shifting: companies must now 'demonstrate' fairness, not just declare it," Fagerland said.

Thousands of public school teachers attend a rally during a strike over wages and working conditions in Sydney, Australia, May 2022. EPA-Yonhap

Perhaps the most significant case came from Australia.

On April 17, the country’s Fair Work Commission ruled that several female-dominated industries, such as child care and health care, had been subject to gender-based undervaluation and were entitled to uniform wage increases. This was followed by a government mandate requiring companies to submit annual gender equality data.

"And we must keep in mind that the pay gap in Australia is only about 11 percent," said Kim Nan-jue, a research fellow at Korea Women's Development Institute. "We can't fix a problem if we don't even know the cause."

However, there is one pressing concern. The discussion around the amendment seems to be losing political momentum, overshadowed by "more immediate economic issues" such as sluggish domestic demand and tariff disputes.

Shin told The Korea Times that he will make his best efforts to push the bill forward.

"From the outset, my focus was not merely on proposing the amendment, but on getting it passed," he said. "Notably, the floor leaders of all five standing committees relevant to the amendment signed on as co-sponsors. I am hopeful that the amendment will soon be discussed in committee."

It is also worth noting that there is a precedent. Beginning with 2024 business reports, Korean companies are required to disclose parental leave utilization rates as part of efforts to boost the birthrate.

Addressing gender-based pay discrimination may not seem urgent, but it is deeply intertwined with broader economic challenges, according to Grosjean.

"Empowering women, having higher revenue for women and having more children will boost internal demand. This is also a way to spin this — if you fix this issue, you would have stronger internal demand."