A job seeker looks at a job information board in Mapo District, Seoul, Feb. 11. Yonhap

The wage gap between large conglomerates and small and medium-sized enterprises (SMEs) widened to a record high in Korea, fueling concerns about widening income disparities across the workforce and a growing reluctance among job seekers to join smaller firms.

According to the Ministry of Data and Statistics, workers at small and medium-size enterprises earned an average of 3.07 million won ($2,125) a month in 2024, compared to 6.13 million won at large corporations. The overall average monthly income across all workers was 3.75 million won, up 3.3 percent from a year earlier.

In Korea, a company’s size is defined by its sales and total assets. A firm qualifies as an SME if its three-year average sales fall within industry-specific thresholds and its total assets are below 500 billion won. Large corporations, in contrast, are those with combined assets of 10 trillion won or more and are designated as business groups subject to cross-shareholding restrictions.

The data covered about 20.94 million jobs enrolled in social insurance programs and occupational pensions for public officials, with the remaining roughly 370,000 estimated using sample data from the National Tax Service.

Income growth at large corporations stood at 3.3 percent, exceeding the 3 percent gain at SMEs for only the second time since the government began compiling the data in 2016, the first being in 2021.

The widening wage gap between SMEs and large corporations makes it harder for smaller firms to attract job seekers.

Job seekers wait for recruitment consultations and interviews at a job fair in Gangnam District, Seoul, Jan. 11. Yonhap

A ministry survey last year of about 34,000 people ages 13 to 34 found that 28.7 percent favored large corporations as employers, the highest share since 2006.

Meanwhile, a 2024 Korea Employment Information Service (KEIS) survey of 1,014 SMEs found their average hiring difficulty score for workers ages 20 to 34 rose to 3.66 out of 5, up 0.39 points from two years earlier. More than half, 53.2 percent, cited a shortage of job seekers as the main difficulty in hiring young workers.

Source: Korea Times News