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Starting Pay at Public Companies Capped From 1st Half

Posted February. 20, 2009 03:10,   


From the first half of the year, starting salaries at state-owned companies will be capped at 30 million won (20,100 U.S. dollars).

Accordingly, college graduates in the public sector who get jobs with public companies with a higher base salary level will see starting pay cut up to 10 million won (6,724 dollars) from last year’s.

The Strategy and Finance Ministry yesterday briefed President Lee Myung-bak at an emergency economy council meeting on measures to limit the entry-level salaries of college graduates at public companies.

The measure is intended to encourage more state-owned and private enterprises to join a job-sharing campaign and prevent the excessive entrance of talent into the public sector.

The ministry will advise state-owned companies to reduce base salaries (except for bonuses and other benefits) for college graduate hires up to 30 percent and set the cap at 30 million won per year.

The ministry conducted a survey on the annual salary levels at 116 public companies -- 24 state-owned, 80 quasi-government run, and 12 others. The average annual salary for new employees last year was 29.36 million won (19,700 dollars), 20.3 percent higher than the average salary of 24.41 million won (16,400 dollars) of 1,800 private companies.

By starting salary amount, 15 companies surveyed offered more than 35 million won (23,500 dollars) a year; 34 between 30 million and 35 million won: 44 between 25 million and 30 million won; and 23 firms under 25 million won.

Korea Export Insurance Corp. had the highest starting salary among public companies (39.4 million won or 26,400 dollars), followed by Incheon International Airport Corp. (38.5 million won or 25,890 dollars) and Korea Exchange (38.4 million won or 25,800 dollars).

The ministry predicted that the average entry salary in the public sector could fall below 25 million won if labor and management follow the government’s advice.

Vice Strategy and Finance Minister Lee Yong-geol said, “If the newly created revenue from the salary cut can be used to resolve youth unemployment, we can create about 1,000 jobs.”