With new salary hike for foreign, local workers, South Korean wage gap grows

February 1, 2013 5:10pm



Korea has increased the minimum wage for all workers, including foreign workers under its Employment Permit System, the Department of Labor and Employment (DOLE) said.

According to the Yonhap news agency, with the salary hike, "the wage gap between employees of South Korea's small manufacturing companies and their counterparts at big companies has widened over the past five years."

The report cited data showing the wider wage gap was "due to smaller firms' waning profit margins."

Yonhap said the average monthly wage for workers at companies of less than 300 employees was 2.68 million won (US$2,500) as of the third quarter of 2012.

This accounts for 51.94 percent of the salary given by bigger companies to their workers, base on data compiled by the Ministry of Employment and Labor, the report noted.

Meanwhile, DOLE Secretary Rosalinda Baldoz cited a report from Philippine Overseas Labor Office Korea head Felicitas Bay that the new rate is 5.76 percent higher from last year.

"The new rate represents an increase of 5.76 percent over last year’s minimum wage rate of 36,640 Korean won for eight hours of work rendered. The minimum wage rate, however, shall not apply to workers with disabilities, those working in their family businesses, domestic workers, and seafarers," the DOLE said in a news release.

Baldoz noted that this "is good news for OFWs working in Korea under the EPS.”
Under the new policy, from Jan. 1 to Dec. 31 this year, the minimum daily wage for workers covered by the new policy is 38,880 Korean won for eight hours of work a day.

This is also equivalent to a monthly rate of KRW 1,015,740 Korean won (equivalent to $958).
According to the DOLE, there are some 30,000 Filipino workers deployed to Korea since 2004, mostly working in the manufacturing sector.

The Minimum Wage Council of Korea is the official body that determines the minimum wage through a system that guarantees minimum livelihood for workers.

It is composed of representatives from management, labor, and public interest, mainly academics,
The Council recommends the minimum wage rate to the MOEL after its annual review and requires employers by law to pay wages not lower than the said rate.

Meanwhile, Baldoz said workers may seek assistance against employers who fail to pay the prescribed salary by going to the Philippine Overseas Labor Office, or to the nearest job stability center which has jurisdiction over the concerned workers’ workplace.

Korea is one of the Philippines’s favored destinations for OFWs because of the demand for foreign workers under the EPS system, especially in labor shortage industries, such as agriculture, stockbreeding, fishery, construction, and manufacturing. - VVP, GMA News