Salary gap deepening amid slump

Samsung Electronics Vice Chairman Kwon Oh-hyun took 6.77 billion won ($6.5 million) in salary last year, according to the company.

He topped the paycheck rankings among salaried executives of listed companies, excluding the company owners. Kwon’s salary was 228.7 times higher than that of the average Korean employee in 2012, 29.6 million won.

His paycheck may be exceptionally large considering that he is in charge of a component business in one of the world’s top technology firms. But recent data show the polarization of incomes among salaried workers is becoming more serious than ever.

According to the National Tax Service, Monday, some 415,000 employees received more than 100 million won for salary in 2012. They accounted for 2.6 percent of total workers who applied for the year-end tax adjustment.

The number of such highly paid workers more than doubled in four years as some 195,000 people received over 100 million won back in 2008. They took up 1.4 percent of the total.

The figure rose to 196,000 in 2009, 279,000 in 2010, 361,000 in 2011 and surpassed 400,000 in 2012.

Of the 415,000 people, 6,098 took in more than 500 million won. As a study by the Economic Reform Research Institute (ERRI) showed that 640 registered executives at listed companies received more than 500 million won, the remaining people would be non-executive-level employees, unregistered executives or executives of unlisted companies.

Contrary to their high salary, the number of workers receiving less than 30 million won per year also increased, showing the growing polarization of incomes. This number rose from some 9.77 million in 2008 to 10.16 million in 2012.

The ratio of the number of employees with over 100 million won in salary per that of employees with less than 30 million won grew from 2 percent to 4.1 percent.

“Since the global financial crisis, large-sized, export-oriented conglomerates have managed relatively well, while domestic demand-oriented companies or small-sized ones have not had good gains,” researcher Wi Pyeong-ryang at the ERRI said.

“So the salaries of workers at former companies have gone up, while those of workers at the latter have gone down or been frozen,” he said.

Wi also said the number of people with lower incomes is growing due to the rising number of non-regular jobs.

“The government has carried out job-creation drives and the number of jobs did increase. But many of the new jobs were non-regular, so it resulted in a greater number of people with low salaries,” he said.

A Bank of Korea report showed that Korea’s GDP grew 3.9 percent annually on average between 2010 and 2013 after the global financial crisis, down from 4.9 percent between 2001 and 2007. But the number of new jobs during the former period rather increased from the latter period, to 390,000 per year from 325,000. “Companies and the government have created more part-time positions through ‘job sharing,’” Wi said.

Even in one company, the salary gap between junior workers and top executives was huge.

For example, at SK Innovation, a registered executive took 4.7 billion won in salary on average last year, 70-fold that of the non-executive workers’ average of 67.1 million won. Samsung Electronics executives’ salary was 64.6 times higher than other workers’, and at Hyundai Department Store, 63.7 times; SK, 55.8 times; and E-mart, 54.2 times. By Kim Rahn The korea times