Increased Wages and Reduced Working Hours

It appears that the wages of laborers are rising while working hours are continuously shrinking during the economic stagnation. In addition, the number of retired people is more than that of the newly employed.

According to the “May 2004 Labor Statistics” announced by the Labor Department, the average wages earned per person in May (the standard of businesses of more than five people) was 2.131 million won, an increase of 4.6 percent from that of same period last year-2.036 million won. This figure is 0.5 percent higher than the 4.1 percent increase in April.

The fixed wage per person was 1.602 million won, an increase of 6.8 percent from the same period last year (1.5 million won), and its rise in April showed the same figure.

For the total wage increase, manufacturing (7.1 percent) ranked the highest, then health care and social welfare (6.5 percent), and transportation (6.1 percent) followed. Communications (-0.6%) was the only one with a decrease.

Meanwhile, working hours per person in May recorded an average of 193.9 hours (44.6 hours per week), a reduction of 1.9 percent compared to last winter’s record of 197.7 hours per month and 45.5 hours per week. Communications (-5.2%) and financial insurance (-4.0%) led this downward trend in working hours.

It was counted that the number of retiring workers in May was 128,000, greater than that of the newly employed (117,000) by 11,000. The excessive number of retirees was the highest since May of last year (18,000) and surged by 57 percent beyond the figure in last April (7,000). This phenomenon was outstanding in small and mid-size companies rather than large ones.

On the other hand, Cho Jun-mo of Soongsil University said, “This could hurt the potential growth rate if market functions of increasing productivity or lowering wages do not work,” regarding the phenomenon of increasing wages despite an actual reduction in working production.

Jong-Hoon Lee taylor55@donga.com