Earnings gap widens between conglomerates, smaller firms

Earnings gap widens between conglomerates, smaller firms
Lee Tae-hoon
Written by Lee Tae-hoon

Earnings gap widens between conglomerates, smaller firms


Korean conglomerates saw their earnings gain at a faster pace last year than smaller firms, data showed Wednesday, reigniting concerns over the prolonged inequality among industries.

According to the compiled data by the parliament’s Trade, Industry and Energy Committee, the productivity index for South Korean conglomerates came to 164.9 points in 2012, while small and medium firms held a comparable figure of 125.8 points.

The number tracks how a firm’s productivity has improved over previous years compared to the base year set at 2005 with 100 points.

Wages paid by conglomerates also expanded at a faster pace in comparison to smaller firms, with their average annual paycheck reaching 53.8 million won (US$50,419) as of 2010, up 17.5 percent from 45.8 million won tallied in 2008.

Small- and medium-sized enterprises saw their average annual salary reach 25.2 million won in 2010, edging up 7.6 percent over the cited period.

Rep. Kim Han-pyo of the ruling Saenuri Party said the gap came as local business groups set their sights on sectors traditionally dominated by smaller enterprises in a bid to seek business opportunities amid the economic slump.

President Park Geun-hye, meanwhile, has been making efforts to lend support to small and medium enterprises in the country where family-controlled conglomerates dominate the economy.

“The government must make efforts to boost the effectiveness of its policies to narrow gaps between conglomerates and smaller enterprises,” Kim added.


About the author

Lee Tae-hoon

Lee Tae-hoon

Lee Tae-hoon is publisher at The Korea Observer. He previously worked for the Korea Times and Arirang TV. You can reach him at

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