SEOUL, March 15 (Korea Bizwire) — The government’s decision to reduce the maximum extended weekly working hours from 68 to 52 will lead to a drop in wages but growth in hiring, according to a report by the National Assembly Budget Office.
Average monthly salaries are estimated to drop by 11.5 percent (377,000 won), with full-time employees suffering less (10.5 percent, 373,000 won) than non-regular workers (17.3 percent, 404,000 won).
Wage decline percentages are projected to be higher among workers at SMEs and “middle standing enterprises” than large corporations (300 or more employed).
The report states the working hours reduction will cost employees at large corporations 7.9 percent of monthly salary, but the wage decline margin will grow to 12.3 percent and 12.6 percent for employees at companies with 30 to 299 workers and at workplaces with 5 to 29, respectively.
The report said, “109.4 billion won in capital will be needed to keep wages up to 90 percent of what they were before the extended working hours restriction.”
To account for the effective labor (6.47 million hours) reduced by the 52-hour work week rule, the report forecasts 125,000 to 160,000 new hires will take place.
A member of the National Assembly Budget Office said actual hiring could exceed the upper limit stated, and the capital needed to maintain wages up to 90 percent of what they were before could also grow. Major deviations from the projected average salary deductions are not expected.