6.7% wage hike likely this year

Wages are not expected to rise in 2001 by as much they did last year, a local research institute said.

The Korea Labor Institute (KLI) said in an analysis of labor trends in the last quarter of 2000 that the average wage increase rate for all industries would remain at 6.7% this year.

This figure is much lower than the average wage increase rate of 8.8% in the third quarter of last year and 12.1% for the whole of 1999.

Noting that the wage increase rate would slow amid the current economic slowdown, sluggish domestic consumption and uneasy financial market conditions, KLI researcher Lee Si-Kyun said there was a possibility that the wage increase rate would be around 5% if the economic growth rate falls below the 5% level.

By industry, the wage increase rate is likely to be 8.7% in the personal service industry, 7.9% in the transportation, storage and communications industries, 7.4% in the insurance industry and 7.1% in the manufacturing industry. The construction (4.2%) and mining (1.9%) industries are expected to see much lower increase rates than other sectors.