It cannot be over-emphasized that the central issues of wage on the process of industrialization are inseperable from the other principal elements of the comprehensive development strategy in every country.
Emphasis, moreover, on the general policy c...
It cannot be over-emphasized that the central issues of wage on the process of industrialization are inseperable from the other principal elements of the comprehensive development strategy in every country.
Emphasis, moreover, on the general policy context of wage guidelines in the broader sense is especially important because such instruments are inherently direct in their influence on real economic development. In addition, the Government's power to operate them effectively seemed to be extremely limited in Korea during the last several decades. Policy actions which fail to recognize the characteristics of such phenomena will more often then not produce preserve effects.
Past experience in Korea, unfortunately, provides the share of confirming instances. The lack of comprehensive policy framework for wage management has at times tended to produce a confusion of objectives and a fragmentation of policy authority without sufficient consideration being given to the inter-actions involved or a sufficiently precise delineation of how particular imstruments are to be integrated into the over-all framework of economic plicy in general.
In principal, it is the ultimate objective of the study to test several assumptions underlying industrial wage structure in Korea and to diagnose at the same time characteristics of such structure so that helpful policy measures shall be drawn out in reality.
Through the study, it was found that there have been considerable difference in industrial wage structure in Korea as compared with other countries. Wage level in agricultural sector, for example, stands not at the bottom but at the level of middle, unlikely to other countries of industrialization stage. Such phenomenon indicates simply that during the last decades there have been remarkable labor shift in the agricultural sector.
The wage level of construction industry is unexpectedly high, taking second place among all industries, due most probably to demand increases of labor in construction industry abroad and domestic boom during last one decade.
In case of mining industry, the level of wage lies only at the middle of all industry, implying that wage difference in the same industry is not balanced since working environment of the industry is not favorable. However, as found from other countries in general, workers of labor-intensive industry, such as light industries, received lower wage than workers of heavy industry.
As for as Korean wage structure is concerned, one of the most notable feature is wider gap of wages by industries. Generally speaking, the wage difference of one industry to another is approximately two (2) times wider than in other countries. This trend is clearly evident when compared the ratio of wage difference with the ratio of industrializationn.
If analyse wage difference among industries in dynamic way, the Hoffmann's Hypothesis is not applicable in Korea because the wage difference among industries is not reduced as industrialization proceeded. Instead, the wage difference among industries has been magnified. in particular, the wage difference of the heavy industry against the light industry has been expanded rather than shrinking.
It was, again, one of the most interesting fact to compare the coefficient of rank correlation of all industries. In computing such coefficient, several assumptions were given. In other words, several economic vaviables were assumed as factors affection wage difference at all industry levels. They are; 1) per capita value added, (2) the years of experience at work, (3) the ratio of Unskilled laborers vs. all laborers, (4) the ratio of male workers vs. all workers at work (5) distribution ratio of labor to gross value added (6) the ratio of college graduates and (7) wage-income ratio.
Based on our computation, it was concluded that per capita value added of workers is most significant factor to wage difference while the other factors are less correlated with it as follows in order; the experience, the ratio of unskilled laborers, college graduates, distribution ratio of labor to gross value added, share of male workers, and production workers.
When high in per capita value added, male workers, the experience, college graduates, the workers get higher wage and they received higher wage when the ratio of Unskilled laborers, distribution ratio of labor to gross value added, the ratio of production workers are low.
The need to improve industrial wage structure in Korea is readily recognized. The main objective, as previously mentioned, of the study is to inquire into whether there exists considerably wider difference in industrial wage and further to analyze factors that influence such wage difference.
Clearly, the analysis on the wage difference at all industry level gives an insight into the trends of wage changes and how various factors influenced these changes.
The salient points, which are derived from statistical analysis and the variables affecting wage difference are summarized as above.
It is therefore writer's careful and considered view that the policy package with respect to reorganization of wage structure should be set forth by government to ensure fuller employment and a wider but more equitable participation of workers in stable economic growth in the years ahead.