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KLI Employment & Labor Brief No. 81 (2018-03): Wage Trends in 2017 and 2018 Outlook
KLI Employment & Labor Brief No. 81 (2018-03): Wage Trends in 2017 and 2018 Outlook
  • Table of Contents


    1. Slowdown in Nominal Wage Increase in 2017 Year-on-Year

    2. Wage Trends in 2017

    3. Changes in the Wage Structure

    4. Wage Outlook for 2018



    Despite GDP growth recovering 3% level in 2017 thanks to strength in manufacturing and investment, nominal wage increase stopped at 2.7% (down by 1.1%p). Adding the effect of faster rise in consumer prices, the real wage increase rate comes further down to 0% level. Such slowdown stems from the wage stagnation among permanent workers and in large workplaces, both of which were affected by the decline in special pay. With continued growth projected in 2018, there exist both drivers and constraints for wage increase. The rapid rise in minimum wage (16.4%), Job Security Fund allocation and government’s commitment to improve quality of jobs will positively affect wage. The 2.6% rise in government employee wage (down by 0.9%p) and the working-hour reduction in workplaces with over 300 employees to be effective from July 1 (i.e. fewer overtime work) will put pressure on wage growth. Overall, wage in 2018 is projected to rise 3.8%, much higher than the 2017 level (2.7%) and the projected GDP growth (3.0%).