Korean Media: South Korean Big Companies' Starting Salaries Are 41% Higher Than Japan's and 37% Higher Than Taiwan's

According to statistics, the starting annual salary of new university graduates in South Korean big companies is 41% higher than that in Japan and 37% higher than that in Taiwan. In response, the business community stated: "Excessively high starting salaries in large companies have become one of the main reasons for polarization. In addition, the government's push for a one-size-fits-all delayed retirement policy continues to increase the burden on enterprises."

On the 1st, the Korea Federation of Entrepreneurs (Korea Business Federation) released the report "International Comparison of Starting Salaries in South Korea, Japan, and Taiwan and Its Implications," which included the above data. The comparative survey was based on the 2024 Korean Ministry of Employment and Labor's labor status survey by employment type, the Japanese Ministry of Health, Labour and Welfare's basic survey on wage structure, and the Taiwanese Ministry of Labor's starting annual salary statistics. Although there are differences in systems and cultures among countries, the comparison between South Korea and Japan, and South Korea and Taiwan was made as equally as possible.

In the South Korea-Japan comparison, the average starting salary of overall university graduates in 2024 was $37,047 (about 53.8 million KRW) in Japan and $46,111 (about 70 million KRW) in South Korea, an increase of 24.5% over the former. The salary of South Korean big companies (enterprises with more than 500 employees) was $55,161, while Japan (enterprises with more than 1,000 employees) was $39,039, with the gap widening to 41.3%. The above results were based on purchasing power parity (PPP) exchange rates reflecting prices, and the total annual salary after deducting overtime pay.

Additionally, when comparing South Korea and Taiwan's equivalent of large companies (non-small and medium-sized enterprises with more than 100 employees), the average starting salary in Taiwan (based on PPP exchange rates, after deducting special bonuses) was $33,392, while South Korea was $45,758, 37% higher than the former.

Japan has continued the low-wage framework established during its long-term economic stagnation known as the "lost thirty years." Similarly, Taiwan has also solidified its low-wage structure to support an export economy mainly based on OEM (production after orders). In contrast, South Korean large companies continuously increased starting salaries to compete for talent during their rapid growth, leading to an increasing gap. The business community argues that major companies mostly adopt a seniority-based wage system, but due to union opposition, it cannot be transformed into a performance-based system, resulting in continuously increasing human resource costs.

Source: Chosun Ilbo

Original: toutiao.com/article/1855983713301513/

Statement: This article represents the views of the author.