By Lee Hyo-sik
Businesses were found to have raised employee salaries by a larger margin this year amid the surging prices of goods and services, the Ministry of Employment and Labor said Wednesday.
It also said a wage increase in the public sector has forced private employers to concede more to the unions, raising concerns that higher labor costs may chip away at the competitiveness of domestic enterprises when the global economy is largely expected to slow down on sovereign debt crises in Europe and the United States.
Of the 8,458 businesses employing over 100 workers nationwide, 3,636 companies settled this year’s wage negotiations with their workers by July, the ministry said, adding that salaries will grow by an average of 5.2 percent, higher than the 4.6-percent increase in 2010.
“We think the higher corporate wage hike reflects soaring consumer prices in the first half of the year. Additionally, state-run companies’ decision to pay their workers 4.1 percent more on average has encouraged private-sector workers to demand a higher pay increase,” a ministry official said.
According to Statistics Korea, consumer prices surged 4.3 percent in the first six months of the year, much higher than last year’s 2.9 percent.
In both 2009 and 2010, public-sector workers’ wages were frozen at 2008 levels.
By industry, the average salary was found to increase by 6.3 percent in the printing, broadcasting and information service sectors.
Manufacturing workers will be paid 5.8 percent more than last year on average.
The ministry also said about 43 percent of businesses completed wage negotiations by July, much higher than last year’s 22.5 percent.
“Over the past few years, management and labor unions have been making more efforts to reach an agreement on wages and other benefits without a strike. Unionized workers have become more cooperative and refrained from making unrealistic demands since employees are allowed to set up more than one union at one company,” the official said.
On Wednesday, Hyundai Motor’s management and labor union reached an agreement on a pay increase and other benefits for this year, ending their annual negotiations without a strike for the third consecutive year. On Aug. 18, its sister company, Kia Motors, also concluded their annual management-labor negotiations without a labor dispute for the second year in a row.