Due to the semiconductor supercycle and the impact of the Iran conflict, significant salary disparities have emerged not only within specific industries but also among affiliates of the same corporate group. Concerns are rising that top talent is gravitating toward high-paying subsidiaries, while experienced workers are increasingly seeking to transition from lower-paying affiliates to those offering better compensation.
On August 18, Ajou Economics analyzed the semi-annual reports of South Korea's five major corporate groups—Samsung, SK, Hyundai, LG, and Hanwha—and found that SK Group exhibited the largest salary gap among its affiliates.
SK Hynix, benefiting the most from the semiconductor supercycle, reported an average salary of 144 million won for the first half of this year. In contrast, SK Oceanplant, a subsidiary in the shipbuilding and marine plant sector, had an average salary of only 32.99 million won, resulting in a staggering 4.3-fold salary disparity.
Even if SK Oceanplant's sale is completed and it becomes a separate entity, SK Networks' average salary is projected to remain below 40 million won, indicating that the salary gap within the group will likely persist at over 3.5 times for the foreseeable future.
Historically, SK Telecom and SK Innovation, known for their stable industries, reported high average salaries of 88 million won and 81 million won, respectively, but still lagged significantly behind SK Hynix.
In contrast, LG Group has maintained a more stable salary gap of 1.5 times among its affiliates. LG CNS, which recorded the highest average salary, stood at 66 million won, while LG Household & Health Care, with the lowest average, was at 43 million won.
However, some industry observers express concern that LG Group's relatively low salary gap is a result of competitive pressures from China affecting its core sectors, including petrochemicals, beauty, and consumer goods. Notably, LG Chem and LG Household & Health Care, which reported lower salaries of 52 million won and 43 million won, respectively, have seen their pay decrease by 2 million won and 4 million won compared to five years ago.
Samsung, Hyundai, and Hanwha reported salary gaps of around 2 times among their affiliates, a phenomenon attributed to these groups having fewer employees and higher average salaries in their financial subsidiaries.
When considering only manufacturing affiliates, the salary gaps for these three groups narrow to around 1.5 times. Specifically, Samsung Group shows a 1.6-fold gap between Samsung SDS (71 million won) and Samsung Heavy Industries (44 million won), Hyundai Group has a 1.5-fold gap between Hyundai Engineering (65 million won) and Hyundai Rotem (43 million won), and Hanwha Group has a 1.56-fold gap between Hanwha Aerospace (75 million won) and Hanwha Solutions (48 million won).
However, experts warn that if Samsung Electronics' substantial performance bonuses are fully reflected in next year's salaries, and if Hanwha Aerospace continues to see high wage increases, the salary gap within Samsung and Hanwha could exceed 2 times.
Among experts, opinions are divided regarding the implications of these salary disparities among affiliates. Some view it as a natural outcome of performance-based compensation, while others express concern about declining productivity in lower-paying subsidiaries.
Seok Byeong-hoon, a professor of economics at Ewha Womans University, stated, "It is entirely normal within a market economy for salary gaps to arise between high-performing and low-performing companies. However, this could lead to increased income inequality and internal discord, such as conflicts between employees."
Lee Jeong-hee, a professor of economics at Chung-Ang University, noted, "Korean society is currently experiencing a boom in specific industries, leading to excessive wage and performance disparities. As wage gaps widen, productivity differences will become more pronounced, particularly in industries that are not growing."
* This article has been translated by AI.
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