Wage Gap Widens Amid Performance Bonus Season

Worker wages increased in the first quarter of this year, driven by expanded performance bonuses among large exporting companies. However, the improvement in real wages, adjusted for inflation, was limited. In March, the wage gap between businesses of different sizes exceeded 2.7 million won, indicating a growing polarization in the labor market.

According to the 'April 2026 Business Labor Force Survey Results' released by the Ministry of Employment and Labor on May 28, the average nominal wage for employees in businesses with one or more regular workers was 4,555,000 won, a 3.4% increase (149,000 won) compared to the same period last year.

However, real wages, which account for inflation, rose only to 3,847,000 won, reflecting a modest increase of 1.3% (49,000 won). The ongoing rise in consumer prices has significantly offset the nominal wage gains.

In March, the total wage per worker across all sectors was 4,230,000 won, marking a 2.3% increase compared to the same month last year. This is a return to normal levels after a spike in February, when wage growth reached 17.8% due to the timing of holiday bonuses.

March is typically a peak period for performance bonuses and special allowances, which highlighted the wage disparities based on company size.

The average monthly wage for employees in businesses with 300 or more workers was 6,512,000 won, approximately 1.7 times higher than that of businesses with fewer than 300 workers, which stood at 3,743,000 won. While the wage growth rates for both categories were similar at 1.7% and 2.0%, the absolute wage gap reached 2,769,000 won.

Special bonuses for regular workers averaged 526,000 won, reflecting a 4.4% increase from the previous year. This growth is attributed to the expansion of performance bonuses among large exporting firms in sectors such as semiconductors, automobiles, and shipbuilding.

In contrast, small and medium-sized enterprises, facing sluggish domestic demand and high interest rates, have struggled to secure funds for performance bonuses, exacerbating the perceived wage gap. For instance, the total wage in the accommodation and food service sector in March was only 2,343,000 won, significantly below the overall average.

The growth in real wages was also minimal. In March, real wages were 3,560,000 won, reflecting only a 0.1% increase compared to the same month last year. The persistent consumer price inflation, remaining in the 2% range, has limited the perceived improvement in wages.

Employment trends continued to show a gradual increase. As of the last business day in April, the number of employees in businesses with one or more workers reached 20,702,000, an increase of 228,000 (1.1%) compared to the same month last year.

Regular workers increased by 90,000 (0.5%), while temporary and daily workers rose by 121,000 (6.3%). By company size, businesses with fewer than 300 workers added 171,000 employees, while those with 300 or more added 57,000.

By industry, the health and social welfare services sector saw the largest increase, adding 115,000 jobs. The finance and insurance sector added 32,000 jobs, and public administration, defense, and social security administration added 26,000. Conversely, the wholesale and retail sector lost 9,000 jobs, and the construction sector lost 5,000.

Manufacturing, which employs the largest share of the workforce, saw an increase of 3,000 jobs, continuing its positive trend. Jeong Hyang-sook, head of the Labor Market Research Division, explained, "After adjusting the statistics to reflect the latest population data, manufacturing has shown a turnaround earlier than initially reported, marking its first increase in seven months."

Last month, the number of new hires was 1,035,000, an increase of 109,000 compared to the same month last year, while the number of separations was 963,000, up by 107,000. Among these, voluntary separations totaled 339,000, an increase of 65,000 (23.7%).