3.8% pay hike expected for state employees next year

Employees at state-run organizations will likely see their salary increase 3.8 percent next year from this year. This represents the biggest rise in four years. The government hopes that a wage hike in state-run firms will influence on pay raise in private-sector firms, and thus help revitalize the economy.

A source at the Strategy and Finance Ministry said on Sunday, “The government will apply the same rate of 3.8 percent in wage hike set for government employees to that for employees of state-run organizations next year.” The government will devise ‘guidelines on budgeting for state-run firms and semi-state agencies for 2015 within as early as next month, and have the guidelines approved by the state-run organization steering committee, before finalizing a plan on wage hikes. Based on the guidelines, state-run organizations will have their boards approve of the plan on wage hikes for next year by year’s end to finalize it.

The rate of wage hike at state-run organizations was frozen in 2010 in the aftermath of the global financial crisis. The rate increased 5.1 percent in 2011, but incrementally declined year after year since to 3.5 percent in 2012, 2.8 percent in 2013, and 1.7 percent this year.

A source at the Strategy and Finance Ministry said, “The rate of wage hike for public sector workers as set by the government will serve as a basis for labor to emphasize the need for wage hikes in their collective bargaining with management at private sector firms.”