The government is expected to raise wages for public corporations and state-managed institutions by a solid 3.8 percent in 2015, so as to set an example for the private sector to follow, a government source said Sunday.
According to a senior official at the finance ministry, the planned wage increase will mirror gains for government employees that have already been set at 3.8 percent.
The increase will be the highest since the 3.5 percent hike authorized for 2012.
Public sector wages were frozen in 2010 but were raised by 5.1 percent the following year. They had been decreasing ever since, reaching just 1.7 percent in 2013.
“The move can help improve the morale of people working for the public sector and give the signal that the government wants to fuel growth by increasing household earnings that can lead to more consumer spending,” the official said.
He added that the raise could act as a guideline to the private sector.
Finance minister Choi Kyung-hwan has been emphasizing growth bolstered by a rise in household earnings and has proposed giving tax breaks to companies that raise wages for their workers.
He even hinted that private companies should raise pay by at least the level set for government employees, with sources hinting that the policymaker may try to meet with business leaders to encourage them to pay more to workers.
Despite such moves, sources in the business community said that, with sluggish growth forecasts for next year, it is hard to push for significant wage hikes.
“Wage increase recommendations made to member companies are based on growth estimates that are not looking good for next year,” an official at the Korea Employers Federation said (KEF).
He pointed out that among the KEF members there were many small and medium enterprises who are barely making ends meet, so asking them to follow the government’s guidelines is not realistic. (Yonhap)
