“Wage Gap That Even Japan Couldn’t Narrow: We Must Start by Changing the Wage System”
[Equal Pay for Work of Equal Value, Part 1]
Only 16% of Large Corporations Have Non-Regular Employees with the Same Duties and Responsibilities
Even SMEs That Have Cut Benefits for Regular Employees Say, “Start by Overhauling the Wage System”
[Sejong = E-Daily Reporter Cho Min-Jung ] Graphic designers at Company A who were employed on an annual salary basis performed duties similar to those of their colleagues on a step-based pay scale but did not receive bonuses equivalent to 800% of their base salary, as well as meal and commuting allowances. Although the company argued that there were differences in the hiring process and job duties, the Seoul High Court ruled last December that it was difficult to find a significant difference in the difficulty or level of responsibility of the work, and thus recognized the company’s liability for damages resulting from wage discrimination. Job posting (Photo = E-Daily DB) As the government prepares a “equal pay for work of equal value” roadmap within the year to reduce unreasonable wage gaps arising from employment status, critics point out that, in addition to codifying this principle in law, a wage system that compensates employees based on the actual work they perform must first be established.
In Japan, which implemented the system before Korea, the salaries and allowances of non-regular workers improved; however, the extent of improvement varied by company, and some responded by lowering the benefits of regular employees.
[Edaily Reporter Kim Il-hwan]
According to the “Survey on the Status of Implementation of Equal Pay for Equal Work” released on the 26th by the Japan Institute for Labor Policy and Training (JILPT), among large companies that created or expanded pay components for full-time fixed-term workers, 52.9% raised monthly salaries by 1–3%. Companies that raised wages by 4% or more accounted for 23.7%, while 21.9% reported no change or a decrease. These findings are based on a survey of responses over the three years following the system’s implementation in 2020.
A wage gap also persisted in overall average wages. According to statistics from Japan’s Ministry of Health, Labor and Welfare, monthly wages for non-regular workers rose by 5.5% from 2020 to 2023, exceeding the 3.7% increase for regular workers. However, the wage level of non-regular workers relative to regular workers rose only slightly, from 66.3% to 67.4%.
Some companies—5.4% of small and medium-sized enterprises (SMEs) and 2.7% of large corporations—chose to respond by reducing benefits for regular employees. In response, the Japanese government has recently begun drafting revised guidelines and enforcement regulations that include more specific standards.
In South Korea as well, establishing standards for compensation that align with actual duties and responsibilities is identified as a key challenge. A representative example is the case of contract bus drivers mentioned in the Ministry of Employment and Labor’s guidelines for preventing discrimination. These drivers, due to route reorganization, ended up operating more complex routes and carrying more passengers than regular employees, yet they still receive lower wages. The underlying principle is that compensation should be based on the actual difficulty and volume of work, rather than maintaining existing wage disparities based on employment status.
Experts emphasize that the government should support labor-management agreements that reflect the characteristics of specific industries and occupations. Park Cheol-sung, a professor in the Department of Economics and Finance at Hanyang University, stated, “Since each worker’s skill level and job duties may vary, a job-based pay system should be established through voluntary labor-management agreement after proper evaluation,” adding, “We must gradually narrow the gap through reforms to the wage system.”
There are also suggestions that, since wage systems vary by company and it is difficult to resolve the gap in the short term, the government should support labor-management dialogue and agreements. Lee Eun-ju, an associate researcher at the Korea Labor Institute, said, “The wage gap is an issue that should not be influenced by political affiliations,” adding, “It must be addressed as a long-term national project that can be sustained even if the government changes.”
Shin-Okubo Street in Tokyo, Japan, an area densely populated with Korean restaurants and shops, was bustling with crowds last June. (Photo = Yonhap News)
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