KUALA LUMPUR - South Korea’s starting salaries for newly hired university graduates are much higher than those in Japan and Taiwan, according to a new study by the Korea Enterprises Federation (KEF).

The study found that entry-level pay in South Korea is 41% higher than Japan’s and 37% higher than Taiwan’s when adjusted for purchasing power parity.

Business groups said the higher pay at large companies is worsening wage gaps and adding pressure to labour costs, especially as talks continue on extending the retirement age.

The findings were published in KEF’s report titled International Comparison of Starting Salaries in Korea, Japan, and Taiwan and Implications, based on official labour data from all three economies.

KEF said the data were adjusted to allow fair comparison despite differences in labour systems and workplace culture.

In 2024, the average starting salary for college graduates in Japan was USD 37,047, compared with USD 46,111 in South Korea, making Korea’s figure about 25% higher.

Among large companies, South Korea’s starting pay rose to USD 55,161, far above Japan’s USD 39,039, creating a gap of more than 41%.

A similar gap was seen in Taiwan, where starting salaries at non-SMEs averaged USD 33,392, compared with USD 45,758 in South Korea.

The report said Japan’s long economic slowdown has kept wages low, while Taiwan’s export-focused manufacturing model has limited salary growth.

In contrast, South Korean conglomerates have steadily raised starting pay to attract talent, especially during periods of rapid economic expansion.

KEF also warned that South Korea’s seniority based wage system, combined with high entry-level pay, is increasing labour costs and widening gaps between big firms and smaller companies.