Income gap widest since 2002

By Lee Hyo-sik

The income gap between workers in the highest and lowest wage brackets widened to a record level last year, as low-income earners faced a harder time making ends meet amid the economic slowdown, a labor research institute said Sunday.

The report is the latest indication showing the country’s increasing wage polarization.

According to the Korea Labor Institute (KLI), a salaried employee who earned the least in the country’s top 20-percent highest-paid bracket made 5.4 times more than what the highest-paid employee in the bottom 10-percent earned.

Last year’s income disparity was the largest since the institute began compiling the data in 2002. In 2010, the gap was 5.1 times.

“Most large companies here performed well on the back of robust exports, despite the European debt woos and stagnant economic activities in the United States and China. They paid their workers relatively well. But small businesses and self-employed struggled due to sluggish domestic demand,” a KLI researcher said.

“As a result, many workers employed by small plants and service-oriented establishments saw their income stagnate or be cut down.”

It was not much different millions of non-regular waged workers here, he said, stressing the income disparity among salaried employees have widened in line with deepening gap between large and small businesses.

“Korea’s income gap between highest-and lowest-paid waged workers was wider than those of most developed countries,” the researcher said.

In 2009, for which the latest international data are available, Korea’s salary gap was 4.69 times, third largest disparity among OECD countries after Israel at 5.19 times and the United States at 4.98 times.

The institute also said salaried employees belonging to the medium bracket earned 3.4 times more than those of the bottom-10 percent in 2011, compared with 2.4 percent in 2010 and 2.3 percent in 2009.