"Wages Are Not Keeping Up With Prices" ... Real Wages Fall for Second Straight Month

As of May this year, real wages fell for a second consecutive month. Continued inflationary pressure from consumer prices, oil prices and exchange rates pushed consumer price growth above nominal wage growth. Excluding months with major holidays, this marks the first two straight monthly declines since July and August 2023.
According to the Business Labor Force Survey released by the Ministry of Employment and Labor (MOEL) on the 30th, real wages per worker in May stood at 3.321 million won, down 1.4%, or 48,000 won, from a year earlier. Following a 1% decline in April, real wages fell for two months in a row. The drop came because the consumer price index rose faster than nominal wages.
Nominal wages per worker in May came to 3.982 million won, up 1.7%, or 66,000 won, from the same month last year. Nominal wages also rose for regular workers, at an average monthly 4.245 million won per person, and for temporary and daily workers, at 1.788 million won per person, by 1.9% and 3.2%, respectively. However, the consumer price index rose 3.1% over the same period, meaning overall nominal wage growth still lagged behind inflation. Analysts say the price index, which had been in the 1% to 2% range in 2024 and 2025, is now trending upward into the 2% to 3% range this year.
Jeong Hyang-suk, head of the labor market survey division at the Ministry of Employment and Labor, explained, "After the war in the Middle East, last year's inflation rate was around 1% to 2%, but now it is 3.1%, so inflation has become much higher." She added, "The situation also reflects the so-called three-high environment, with high exchange rates, oil prices and inflation all at once."
Another factor appears to be the growing share of temporary and daily workers, whose wage levels are relatively lower than those of regular employees.
Jeong added, "There is a base effect because temporary and daily workers, which had been negative for a long period, turned positive. Jobs and working hours in the lodging and restaurant sector also increased as the industry improved through subsidies and other support." She continued, "Since the wage growth rate for temporary and daily workers came in at 3.2%, it is difficult to say that the jobs themselves have worsened."
This is only the second time real wages have fallen for two consecutive months, excluding months with major holidays. The previous case was in July and August 2023, when real wages also declined for two straight months. At the time, nominal wage growth from a year earlier was only around 1.1%.
A ministry official said, "Inflation was not at a high level then, and special bonuses were very low." The official added, "There may also have been an effect from differences in payment timing depending on wage negotiations." The official went on to say, "April, May and June are relatively quiet months for wages, so based on past experience, the negative trend could continue."
There were also cases of real wages falling in December 2023 and January 2024, but that was because Lunar New Year fell in January 2024. Lunar New Year, which falls in January or February, and Chuseok, which falls in September or October, can shift from year to year, so those months are excluded when looking at the underlying trend.
[email protected] Kim Jun-hyeok Reporter