South Korean Ministry of Strategy and Finance said that all public firms and government agencies will freeze wages next year, the Korea Times reported on Friday.
The ministry also said that the public sector will cut general spending by an average of more than 5 percent next year in effort to share the burden of the troubled economy. "The measures are aimed at suppressing excessive expenditure on wages and other costs, encouraging more effective management of the public sector,"the ministry said.
While employees of public enterprises see wage freezes, the ministry said heads of these institutions will actually see pay cuts.
The government already announced in June that heads of state-run enterprises will be paid 16.3 percent less than the previous year on average, and auditors will receive 26.7 percent wage cuts.
To reduce general expenditure by 5 percent, overtime payment to those at managerial level will be abolished and overseas business trips of all employees will also be refrained unless necessary, the ministry said.
Furthermore, the government abandoned creating new allowances. Public enterprises often pay lots of allowances for workers, thus de facto paying good money while announcing low official basic salaries.
(Xinhua News Agency November 14, 2008)
