The income of wage workers in South Korea increased by only 2.7 percent in 2023, below the inflation rate, due to the weak economy.

According to data released by Statistics Korea on Tuesday, the average income of wage workers stood at 3.63 million won ($2,537) as of December 2023, up 2.7 percent from the previous year.

The income increased at the slowest pace since the agency began compiling related data in 2016.

The consumer price index (CPI), meanwhile, rose 3.6 percent from 107.7 to 111.6 during the same period, indicating that wage growth failed to keep pace with inflation.

The average income of wage workers increased from 3.6 percent in 2020 to 4.1 percent in 2021 and 6 percent in 2022, before declining in 2023.

“The main reason for this slowdown was that exports fell 7.5 percent in 2023 compared to the previous year, which led to a reduction in performance bonuses and special allowances,” said an official from Statistics Korea.

The sharp decline in performance bonuses also led to minimal wage growth at large companies.

The average pre-tax income of large companies was 5.93 million won in 2023, up only 0.4 percent year-on-year, while small and medium-sized enterprises (SMEs) saw a 4.3 percent rise in average income to 2.98 million won.

This increase was largely attributed to the rise in the minimum wage.

The minimum wage was set at 9,620 won per hour in 2023, up 5 percent from 9,160 won a year earlier.

By industry, the highest average income was in the finance and insurance sector at 7.53 million won, followed by electricity, gas, steam, and air conditioning supply at 6.75 million won, and international and foreign organizations at 5.1 million won.

The lowest average incomes were in accommodation and food services at 1.81 million won, associations, organizations, and personal services at 2.23 million won, and agriculture, forestry, and fisheries at 2.43 million won.

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