e-Labor News No. 151
Issue paper
Economic Situations of Families Receiving the Minimum Wage∗
Sang-bong Oh∗∗
The Minimum Wage Act of Korea stipulates that the main reason for enforcing the
minimum wage is “to stabilize low-wage workers’ life . . . , thereby contributing to the sound
development of the national economy,” according to the article stating the purpose of the act.
Article 4 of the act specifies the criteria for determining the minimum wage. These include
workers’ cost of living, wages of similar workers, labor productivity, and the distribution of
income. Hence, the Minimum Wage Council considers these factors when setting the minimum
wage, referring to three reports during the deliberation process. The first is a survey report of
employers’ and employees’ views on the previous year’s minimum wage; the second addresses
the previous year’s living expenses for unmarried workers with no dependants in order to
determine the minimum cost of living; and the third analyzes labor productivity and the
distribution of income, as well as how many workers will be affected by the level of the current
year’s minimum wage. Whereas these three reports focus on the economic situations of
individual employees, this paper sheds light on the economic situations of “families” receiving
the minimum wage.
I. Data Used for Analysis
This paper examines the economic situations of the families who are expected to be
affected by the minimum wage, using cross-sectional data drawn from the 15th Korea Labor &
Income Panel Study (KLIPS), conducted by the Korea Labor Institute. The KLIPS data are
slightly different from the results of the Economically Active Population Survey (EAPS),
conducted by Statistics Korea, in terms of descriptive statistics. Two notable differences are that
the employment-to-population ratio of the KLIPS is lower than that of the EAPS, and that the
KLIPS has a higher proportion of permanent workers and a much lower proportion of
temporary workers out of all wage earners. The latter seems to be attributed to the differences in
survey questions.
∗
This paper is a translated version of a paper published in the Monthly Labor Review (KLI, August 2014).
Research fellow, Korea Labor Institute ([email protected]).
∗∗
1
Table 1. Comparison of KLIPS (Korea Labor Institute) and EAPS (Statistics Korea) Data
(Thousand persons, %)
KLIPS
Economically active population
Employed persons
Total
42,590
(100.0)
41,582
(100.0)
Employed
24,226
( 56.9)
24,681
( 59.4)
Unemployed
18,365
( 43.1)
16,901
( 40.6)
Wage earners
17,578
( 72.6)
17,712
( 71.8)
6,648
( 27.4)
6,969
( 28.2)
Permanent
12,974
( 73.8)
11,097
( 62.7)
Temporary
2,994
( 17.0)
4,988
( 28.2)
Daily
1,610
( 9.2)
1,627
( 9.2)
Self-employed
5,469
( 82.3)
5,718
( 82.2)
Unpaid
1,178
( 17.7)
1,251
( 17.8)
Non-wage earners
Wage earners
Non-wage earners
EAPS
One of the limitations of the KLIPS is the small sample size (i.e., small number of
observations). Whereas the EAPS, the official source of labor market statistics in Korea, covers a
sample of 32,000 households, the KLIPS covers only 5,000 households. Since those who are
paid at or below the minimum wage make up at most 15% of all workers, the KLIPS data are
limited in their ability to provide complete and accurate information about the realities facing
families affected by the minimum wage.1
II. Characteristics of Individual Workers
More than half of all workers in Korea are paid more than double the minimum wage.
However, many employees still earn the minimum wage or below. According to the KLIPS data,
7.91% of all wage earners in Korea currently earn the minimum wage or less.2 The percentage of
wage earners whose earnings are at the minimum-wage level (100–110%) is 4.51%, and those
who earn 110 to 130% of the minimum wage account for 9.41%. Neither the EAPS nor the
KLIPS takes into account the minimum wage for additional jobs (sideline jobs) when generating
minimum-wage statistics. If such data were included as part of the statistics, the rate of
1 Despite this limitation, this paper uses data from the KLIPS, as it is almost the only source of information on
wages and working hours of individual families and their members.
2 The aforementioned differences in the KLIPS and EAPS result in a disparity in the minimum wage statistics: the
rate of noncompliance with the minimum wage requirement is 7.91% based on the KLIPS data and 9.6% based on
the EAPS data.
2
noncompliance with the minimum-wage requirement, as well as the number of workers affected
by the minimum wage, would increase.3
Table 2. Numbers and Percentages of Workers, by Wage Level
(Persons, %)
(Worker’s wage)/(Minimum wage)
No. of workers
0–70%
402,038
2.29
70–90%
708,007
4.03
90–100%
279,810
1.59
100–110%
792,372
4.51
110–130%
1,653,717
9.41
130–200%
4,430,690
25.22
200% or more
9,304,380
52.95
17,571,014
100.00
Total
Percentage
Table 3 shows the hourly and monthly wages of workers by wage level compared with
the minimum wage. Given that the minimum wage in 2012 was 4,850 KRW, both the median
and the average of the hourly wages of workers earning below 100% of the minimum wage are
less than 4,850 KRW. Note that the average hourly wage of workers earning more than double
the minimum wage is significantly higher than their median hourly wage, which indicates that
distributions of wage or income tend to be positively skewed. Another characteristic worth
mentioning is that differences in hourly wages translate into differences in monthly wages. On
average, workers who are paid at or below the minimum wage (less than 110% of the minimum
wage) make less than 1 million KRW per month—not even a third of the average monthly wage
of those earning 200% of the minimum wage or more.
The differences in hourly wages can be attributed to several factors, one of which is
employment type: the proportions of regular employees and non-regular employees differ
significantly depending on the wage level. Among those receiving less than 130% of the
minimum wage, more than 60% are non-regular workers. In contrast, non-regular workers
account for less than 20% of those earning 200% of the minimum wage or more. As for those
being paid below the minimum wage, more than 70% are non-regular employees.4
3
The EAPS does ask how many hours are allocated to additional jobs but not the amount of income earned
specifically from those jobs. The KLIPS currently does not ask any questions about additional jobs. Therefore, it is
not possible to calculate the rate of noncompliance with the minimum-wage requirement or the number of workers
affected, with regard to the data on additional jobs incorporated in the statistics.
4 The regular/non-regular status mentioned in this paper is identified through self-declarative questions of the
KLIPS that ask respondents to subjectively categorize their employment type. Therefore, it differs from the
3
Table 3. Hourly and Monthly Wages of Workers, by Wage Level
(Worker’s wage)/
(Minimum wage)
Hourly wage
(thousand KRW)1)
Monthly wage
(ten thousand KRW)
Median
Average
Median
Average
0–70%2)
2.459
(2.732)
1.878
(2.270)
50.0
(50.0)
46.7
(55.5)
70–90%
3.825
3.736
80.0
79.7
90–100%
4.303
4.306
94.0
93.4
100–110%
4.781
4.741
100.0
95.2
110–130%
5.623
5.528
100.0
110.3
130–200%
7.511
7.512
150.0
152.1
14.344
16.710
280.0
309.5
200% or more
Note. 1) Monthly earned income used for determining hourly wages was surveyed in the unit of ten thousand KRW.
Thus, the author of this paper decided to show hourly wages in thousands rather than in ones to better reflect
accuracy.
2) Numbers in ( ) have been calculated without taking into consideration the workers who do not get paid at all.
Table 4. Distribution of Employment Types, by Wage Level (%)
(Worker’s wage)/(Minimum wage)
Regular workers
Non-regular workers
Total
0–70%
23.76
76.24
100.00
70–90%
15.69
84.31
100.00
90–100%
26.23
73.77
100.00
100–110%
31.74
68.26
100.00
110–130%
35.48
64.52
100.00
130–200%
56.68
43.32
100.00
200% or more
80.59
19.23
100.00
Note. Among those earning 200% of the minimum wage or more, 0.18% did not provide answers.
Table 5 shows the distribution of wage earners’ jobs by wage level. The majority of
employees who are paid less than the minimum wage perform manual labor or are employed in
service and sales jobs. In contrast, workers whose earnings are at 130% of the minimum wage or
above tend to have professional and related jobs or clerical jobs.
regular/non-regular status used in the supplementary survey of the EAPS on employment type.
4
Table 5. Distribution of Jobs, by Wage Level (based on the 6th revision of the Korean Standard Classification
of Occupations) (%)
90–100% 100–110% 110–130% 130–200% 200% or more
0–70%
70–90%
Manager
-
-
-
Professional/related
8.69
5.38
Clerical
9.77
Service
-
0.05
-
2.34
5.44
10.62
11.20
21.02
33.93
1.20
7.96
4.66
10.77
16.55
24.59
14.25
21.22
23.00
21.88
19.58
8.04
4.36
Sales
6.40
11.30
17.89
17.22
18.78
12.01
5.27
Agriculture/forestry/
fishery (skilled worker)
-
0.35
0.29
1.07
1.48
0.64
0.22
10.23
9.23
9.57
8.99
5.78
11.54
12.61
7.47
8.68
4.57
7.27
9.54
14.72
13.01
43.19
42.65
31.28
28.29
22.82
15.47
3.67
100.00
100.00
100.00
100.00
100.00
100.00
100.00
Technical/related
Equipment, machine
operation, and
assembly
Menial labor
Total
Table 6 shows the distribution of industries in which workers are employed by wage
level. The higher the wage, the larger the proportion of workers employed in the manufacturing
industry. The average wage of the manufacturing sector is relatively higher than for the other
sectors. Employees affected by the minimum wage tend to work in accommodations/food
services, wholesale/retail trade, and membership organizations/repair/other personal services.
On the other hand, a high percentage of workers who are paid more than double the minimum
wage
work
in
the
fields
of
education,
information/communications, and construction.
5
public
administration,
finance/insurance,
Table 6. Distribution of Industries, by Wage Level (based on the 9th Revision of the Korean Standard
Industrial Classification) (%)
0–70%
70–90% 90–100% 100–110% 110–130% 130–200%
200% or
more
Agriculture/forestry/fishery
6.33
3.30
1.13
1.44
2.11
0.49
0.55
Mining/quarrying
-
-
-
-
-
-
0.01
17.88
15.61
13.64
15.92
17.21
23.09
23.88
Electricity/gas/steam/water
supply
0.39
0.40
-
0.13
-
0.12
0.98
Sewerage/waste
management/materials
recovery/remediation
-
-
-
-
0.14
0.23
0.60
Construction
4.14
0.57
2.45
1.60
2.94
9.71
10.34
Wholesale/retail trade
9.41
12.83
20.54
15.31
19.85
14.14
7.45
Transportation
5.47
3.76
3.53
2.85
2.78
4.26
4.46
Accommodations/food services
8.89
15.56
14.48
23.15
15.41
6.22
1.59
Information/communications
0.47
1.40
-
1.27
1.05
3.02
5.33
Finance/insurance
2.57
-
1.33
-
2.44
1.63
5.69
11.83
9.19
6.78
4.63
5.67
2.41
1.88
Professional/scientific/technical
activities
-
0.35
-
1.40
1.07
2.56
5.99
Business facility
management/business support
services
5.93
7.12
8.29
5.98
3.16
4.83
1.57
Public administration/national
defense/social security
administration
5.00
4.64
1.74
2.67
2.65
2.87
7.65
Education
7.70
2.52
5.17
7.15
6.42
6.42
11.74
Human health/social work
3.51
7.32
7.04
3.94
10.72
11.77
5.90
Arts/sports/recreation related
services
1.05
3.42
3.09
2.95
1.20
1.37
0.71
Membership
organizations/repair/other
personal services
8.33
10.52
10.80
8.65
4.36
4.15
3.50
Activities of households as
employers/undifferentiated
goods- and services-producing
activities of households for own
use
1.11
1.48
-
0.95
0.82
0.64
0.06
Activities of extraterritorial
organizations and bodies
-
-
-
-
-
0.05
0.11
Manufacturing
Real estate/renting/leasing
6
III. Characteristics of Individual Families5
This section deals with a particular unit called a “family,” which is clearly distinguished
from a “household.” Since the KLIPS only collects data on individual households without
identifying different families that may exist within them, it is necessary to use certain criteria to
divide each household into separate families. The criteria used in this paper is the relationship of
family member to head of household (HOH).
First of all, if a son or daughter of the HOH resides with his/her spouse or his/her child
(i.e., grandchild of HOH), they are considered to be an independent family. In some cases where
the spouse of a son or daughter of HOH resides only with his/her child (i.e., grandchild of
HOH), they are also counted as a separate family, and the spouse becomes the family head.
However, cases in which a married brother or sister of HOH or a married grandchild of HOH
lives with HOH have been excluded from the analysis.6 Additionally, any unmarried household
member, other than a parent/grandparent of the HOH or a parent/grandparent of the spouse of
the HOH, who is aged 25 or above is considered the family head of a separate family. Also, any
relative by consanguinity or by affinity who lives together with HOH is also counted as the
family head of an independent family.7
Using individual families identified in this way, the wage distributions of family heads
(who are wage earners) and their spouses have been analyzed and are shown in Tables 7 through
9. Table 7 shows the proportion of family heads with/without a spouse; and for those who have
a spouse, the spouse’s employment status. All of these data are grouped according to the wage
level of family heads. No noticeable correlation is observed between the wage level of family
heads and whether they have a spouse or not. However, if a family head does have a spouse,
there is a statistically significant relationship between his wage level and the employment status
of his spouse. In families where family heads are paid less than the minimum wage, 60% or more
of their spouses are unemployed. On the other hand, the further the earnings of family heads
surpass the minimum wage, the higher the proportion of their spouses working as wage earners.
What is particularly noteworthy from Table 7 is that 60% of more of family heads who are paid
at or below the minimum wage rely on a single income stream to support their entire family.8
5
As a single family consists of various members such as the family head, his spouse, and other family members, it is
difficult to determine the criteria for assigning weights (e.g., what combination of weights to assign). Thus, the
author of this paper chose not to assign weights in analyzing data on families.
6 Such cases are less than 1% of all observations.
7 Assuming the family head and the spouse of the family head are not under obligation to support any family
member age 25 or above, other than their parent/grandparent, such family member is regarded as the family head of
a separate family.
8 Although other family members may generate additional income, the amount or percentage of income is not
7
Table 7. Family Head with a Spouse: Spouse’s Employment Status, by Wage Level of Family Head (%)
Spouse
(Wage of family head)/
(Minimum wage)
Family head
with a spouse
Employment status of spouse
Family head
without a
spouse
Unemployed
Non-wage earner
Wage earner Self-employed
Unpaid
0–70%
42.86
57.14
60.00
31.11
8.89
0.00
70–90%
38.71
61.29
68.75
31.25
0.00
0.00
90–100%
37.78
62.22
70.59
23.53
0.00
5.88
100–110%
31.19
68.81
67.65
23.53
8.82
0.00
110–130%
32.60
67.40
41.89
40.54
16.22
1.35
130–200%
42.61
57.39
47.95
42.27
9.46
0.32
200% or more
57.39
42.61
52.07
39.79
7.89
0.24
Table 8 shows the income status of families whose family heads do not have a spouse,
grouped according to the wage level of family heads. In almost all wage levels, the proportion of
single-person families is higher than that of families of more than two members because this
study defines any unmarried household member age 25 or above as the family head of an
individual family. However, one can see that as the wage level of family heads increases, the
proportion of single-person families declines and the proportion of families of more than two
members with incomes increases. Put differently, family heads who do not have a spouse and
who earn close to or less than the minimum wage are less likely to receive income support from
other family members. In contrast, it is more common for family heads who do not have a
spouse and who earn double the minimum wage or more to enjoy additional income
contributions from other family members.
significant.
8
Table 8. Family Head with No Spouse: Family Income Status, by Wage Level of Family Head (%)
Spouse
Income status of family
Family of more than 2 members
(Wage of family head)/ Family head with Family head
(Minimum wage)
a spouse
without a spouse
Single-income
Multiple-income
Single-person
family
0–70%
42.86
57.14
6.67
21.67
71.67
70–90%
38.71
61.29
7.89
27.63
64.47
90–100%
37.78
62.22
3.57
28.57
67.86
100–110%
31.19
68.81
4.00
24.00
72.00
110–130%
32.60
67.40
12.42
30.72
56.86
130–200%
42.61
57.39
12.18
35.13
52.69
200% or more
57.39
42.61
15.90
53.60
30.50
Table 9 shows the wage distributions of family heads and their spouses using the selected
data from Table 7 of the cases in which the spouses are wage earners. Although some unrealistic
figures are seen due to the limited number of observations available, the table data reveal a
noteworthy feature. Among families where family heads earn more than double the minimum
wage, the spouses are also paid more than double the minimum wage in about 50% of them. In
contrast, the percentage of families in which the family head earns less than but the spouses earn
more than double the minimum wage is 25% or less.
Table 9. Family Head with a Spouse: Wage Distributions of Family Head and Spouse, by Wage Level of
Family Head ( %)
Wage of family head)/
(Minimum wage)
0–70%
70–90% 90–100% 100–110% 110–130% 130–200%
200% or
more
Total
0–70%
0.00
7.14
0.00
21.43
28.57
21.43
21.43
100.00
70–90%
6.67
20.00
13.33
0.00
40.00
13.33
6.67
100.00
90–100%
0.00
0.00
0.00
0.00
50.00
25.00
25.00
100.00
100–110%
0.00
12.50
12.50
12.50
25.00
25.00
12.50
100.00
110–130%
3.33
20.00
3.33
10.00
26.67
20.00
16.67
100.00
130–200%
1.49
11.94
2.24
14.18
26.87
29.85
13.43
100.00
200% or more
1.60
4.01
2.00
6.01
14.03
26.25
46.09
Analyzing the sample from a different perspective, Table 10 and Table 11 show the
distributions of family heads and their spouses who are wage earners, grouped by wage level of
spouses. Table 10 indicates that as the wage level of spouses declines, family heads are more
likely to be unemployed or self-employed and are less likely to be wage earners. When spouses
9
are paid at or below the minimum wage, about 20% of their family heads are unemployed,
approximately 30% are self-employed, and only 50% are wage earners. Given that the income
level of the self-employed is usually lower than that of wage earners, it appears that the income
of family heads does not sufficiently contribute to raising family incomes in almost half the cases
where spouses are paid at or below the minimum wage.
Table 10. Employment Status of Family Head, by Wage Level of Spouse (%)
(Wage of spouse)/
(Minimum wage
70–90%
Unemployed
32.26
27.47
15.63
22.86
11.22
15.59
19.43
Wage earner
38.71
51.65
53.13
53.33
62.44
62.71
67.10
Non- Self-employed
wage Unpaid
earner
29.03
20.88
31.25
22.86
26.34
21.69
13.21
Total
90–100% 100–110% 110–130% 130–200%
200% or
more
0–70%
0.95
100.00
100.00
100.00
100.00
0.26
100.00
100.00
100.00
Table 11 shows the distributions of family heads and their spouses using selected data
from Table 10 for the cases in which the family heads and spouses are wage earners. One can see
that a low level of income earned by spouses can usually be compensated for by the income of
family heads when they work as wage earners. However, the patterns differ across different wage
levels of spouses. When spouses earn 1.3 to 2 times the minimum wage or more than 2 times the
minimum wage, the probability that their family heads earn more than 2 times the minimum
wage is approximately 70% and 90%, respectively. On the other hand, when spouses earn less
than 1.1 times the minimum wage, the probability that their family heads earn more than 2 times
the minimum wage is only about 50%. Thus, when spouses are paid at or below the minimum
wage, the extent to which family incomes are supplemented by the income of family heads is
relatively small.
10
Table 11. When Family Head and Spouse Are Both Wage Earners: Their Wage Distributions, by Wage Level
of Spouse (%)
(Wage of spouse)/
(Minimum wage)
70–90%
0–70%
0.00
2.13
0.00
5.36
3.13
1.62
1.16
70–90%
8.33
6.38
11.76
0.00
4.69
1.08
0.39
90–100%
0.00
0.00
0.00
0.00
1.56
0.54
0.39
100–110%
0.00
2.13
5.88
1.79
1.56
1.08
0.39
110–130%
8.33
12.77
5.88
5.36
6.25
3.24
1.93
130–200%
16.67
34.04
17.65
33.93
28.13
21.62
6.95
200% or more
66.67
42.55
58.82
53.57
54.69
70.81
88.80
100.00
100.00
100.00
100.00
100.00
100.00
100.00
Total
90–100% 100–110% 110–130% 130–200%
200% or
more
0–70%
Next, we examine the economic status of families according to different wage levels of
family heads or of spouses. This analysis considers only income in the form of wages; income
from self-employment and transfer income are not included.
Table 12. Family Head with a Spouse: Wage Income Level of Family, by Wage Level of Family Head
Hourly wage
(thousand KRW)
Monthly wage
(ten thousand KRW)
Of family head
Of whole family
Of family head
Of whole family
Total no. of
family
members
0–70%
1.924
5.085
60
120
2.49
70–90%
3.664
5.626
97
135
2.33
90–100%
4.375
6.383
109
141
2.69
100–110%
4.726
6.450
106
145
2.68
110–130%
5.502
8.763
117
178
2.57
130–200%
7.681
11.440
170
241
3.08
17.750
22.493
338
421
3.44
(Wage of family head)/
(Minimum wage)
200% or more
Note. Figures do not include spouses who are self-employed or unpaid family workers.
Table 12 shows the average hourly and monthly wages of family heads with a spouse and
those of whole families according to different wage levels of family heads. When family heads
are paid at or below the minimum wage, the total wage income of family members is less than
1.5 million KRW, and about 2.5 family members depend on it for their livelihood.
The wage income level of families can differ greatly depending on whether spouses work
or not. Table 13 shows the wage income of family heads and that of whole families for cases
where family heads are wage earners but spouses do not work. When spouses do not work, the
11
wage income of whole families is almost the same as that of family heads, as there is little
additional wage income from other family members. Meanwhile, the number of family members
is quite consistent regardless of whether spouses are employed or not. Thus, when spouses are
unemployed and family heads earn the minimum wage or below, the total wage income of family
is less than 1.2 million KRW, and the livelihood of about 2.5 persons is dependent upon that
income.
The economic situations of families where spouses are employed differ greatly from the
above. Even when family heads earn the minimum wage or below, the monthly wage income of
the family is approximately 2.4 million KRW, more than double that of families where spouses
do not work.
Table 13. When Spouses are Unemployed: Wage Income Level of Family, by Wage Level of Family Head
(Wage of family head)/
(Minimum wage)
Hourly wage
(thousand KRW)
Monthly wage
(ten thousand KRW)
Total no. of
Of family head Of whole family Of family head Of whole family family members
0–70%
2.190
2.467
67
72
2.41
70–90%
3.610
3.610
92
92
2.21
90–100%
4.385
4.385
112
112
2.75
100–110%
4.713
4.910
105
111
2.61
110–130%
5.464
5.464
113
113
2.29
130–200%
7.714
8.218
173
182
2.94
18.200
18.362
351
354
3.40
200% or more
Table 14. When Spouse are as Wage Earner: Wage Income Level of Family, by Wage Level of Family Head
(Wage of family head)/
(Minimum wage)
Hourly wage
(thousand KRW)
Monthly wage
(ten thousand KRW)
Total no. of
Of family head Of whole family Of family head Of whole family family members
0–70%
1.411
10.134
46
212
2.64
70–90%
3.785
10.063
106
228
2.60
90–100%
4.347
12.377
101
230
2.50
100–110%
4.763
10.875
111
243
2.88
110–130%
5.541
12.172
120
244
2.87
130–200%
7.644
15.095
167
309
3.24
17.161
27.900
322
509
3.49
200% or more
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Table 15 shows the wage income of whole families for cases where there is no spouse
but there are other family members who are wage earners. The income level of whole families is
generally proportional to the income of family heads. One noticeable characteristic of Table 15 is
that the number of family members is higher compared with families with a spouse. Therefore,
even if the total family wage income in Table 15 is higher than that in Table 13 where spouses do
not work, one must take care not to jump to the conclusion that families in Table 15 are in better
economic circumstances. When family heads earn the minimum wage or below, the total wage
income of family is around 1.3 million to 1.5 million KRW, and the livelihood of more than 3
family members is dependent upon that income.
Table 15. Family With No Spouse But With Other Family Members: Wage Income Level of Family ,by Wage
Level of Family Head
(Wage of family head)/
(Minimum wage)
Hourly wage
(thousand KRW)
Of family head
Monthly wage
(ten thousand KRW)
Of whole family
Of family head
Total no. of
Of whole family family members
0–70%
2.194
5.934
59
131
3.53
70–90%
3.719
5.496
79
112
3.41
90–100%
4.316
8.015
88
158
3.00
100–110%
4.705
7.011
96
134
3.33
110–130%
5.505
9.538
111
189
3.09
130–200%
7.613
11.037
155
220
2.92
16.976
21.919
317
408
3.26
200% or more
Table 16 shows the income status of single-person families. When family heads are paid
at or below the minimum wage, the monthly wage income of family is less than about 1 million
KRW.
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Table 16. Single-Person Family: Wage Income Level of Family, by Wage Level of Family Head
(Wage of family head)/
(Minimum wage)
Hourly wage
(thousand KRW)
Monthly wage
(ten thousand KRW)
0–70%
2.326
51
70–90%
3.782
74
90–100%
4.343
105
100–110%
4.736
95
110–130%
5.474
109
130–200%
7.563
153
13.926
253
200% or more
Table 17 shows the wage income of whole families according to different wage levels of
spouses. When spouses are paid at or below the minimum wage, the total wage income of family
is approximately 2 million KRW, on which about 3 family members maintain their livelihood.
Table 17. Wage Income Level of Family, by Wage Level of Spouse
(Wage of spouse)/
(Minimum wage)
Hourly wage
(thousand KRW)
Monthly wage
(ten thousand KRW)
Total no. of
Of whole family family members
Of spouse
Of whole family
Of spouse
0–70%
2.149
6.992
44
135
2.48
70–90%
3.754
9.597
74
195
3.00
90–100%
4.352
11.105
84
214
3.03
100–110%
4.726
11.436
92
226
3.06
110–130%
5.525
12.920
103
248
3.22
130–200%
7.298
16.359
137
309
3.41
15.450
27.149
273
491
3.38
200% or more
IV. Conclusion
This paper examines the economic status of families in which family heads or spouses
earn the minimum wage or below. The average monthly wage of single-person families who are
paid at or below the minimum wage is 0.5 million to 1 million KRW. It would be important to
review whether such a wage level is high or low, but equally important is to examine whether the
economic status of families of more than two persons is actually better than that of single-person
families, as the minimum wage is currently determined based on the survey of unmarried, singleperson families. If the economic situations of families of more than two persons are worse than
14
those of single-person families, it would be necessary to expand factors to be considered when
determining the minimum wage.
Families in which spouses are wage earners generally consist of about 2.5 members and
earn income of more than 2 million KRW even if family heads earn just the minimum wage or
below. Apparently, their economic situations are better than that of single-person families.
However, when spouses are unemployed, the total wage income of families whose family heads
earn the minimum wage or below is only about 0.7 million to 1.1 million KRW per month, and
such families also consist of about 2.5 persons. This means that families with an income level
similar to that of single-person families must support 2.5 times the number of family members.
Furthermore, among families where family heads earn the minimum wage or below, the
proportion of those with employed spouses is smaller than those with unemployed spouses.
Therefore, the economic situations of families with spouses who do not work requires attention.
In addition, the circumstances of families in which there is no spouse but there are other family
members are much worse than those of single-person families. Such families generally consist of
about 3 to 3.5 members and earn income of only 1.1 million to 1.4 million KRW in total when
family heads earn the minimum wage or below. In other words, the economic status of families
of more than two persons with unmarried family heads is definitely not better than that of singleperson families. Therefore, in determining the minimum wage, it would be necessary to consider
not only the minimum wage of individual workers or the living expenses of unmarried workers
with no dependants, but also the minimum wage and living expenses for different family types.
Last, as mentioned in the introductory section, the data used in this paper were drawn
from the 15th KLIPS conducted by the Korea Labor Institute. It is regrettable that some
unrealistic figures were found due to the limited number of observations available and thus the
paper failed to present a more detailed and thorough analysis. Going forward, however, adding
some household-identifying variables and more information regarding household members to
the EAPS or to the Local Area Labor Force Survey would facilitate a more detailed analysis of
the economic situations of families.
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