![[단독]LG Electronics raises wages by 9% this year,’a record-breaking level’… Raise the starting salary](https://image.edaily.co.kr/images/Photo/files/NP/S/2021/03/PS21031801378.jpg "[단독]LG Electronics raises wages by 9% this year,’a record-breaking level’… Raise the starting salary")
According to related industries on the 18th, LG Electronics and the labor union (hereinafter referred to as the labor union) agreed on a wage increase rate of 9% this year through a wage and collective bargaining agreement. This is the highest level ever. LG Electronics, after freezing wages for three years in a row from 2007 to 2009, has increased wages from the low-single-digit level until last year. The trade unions of the Korean Federation of Trade Unions (KFTU), the representative of the negotiations, agreed in a mutually friendly atmosphere, and this year, the agreement was concluded with no dispute for 32 consecutive years.
LG Electronics’ labor and management agreed to apply an increase rate according to last year’s performance grade for each individual and raise the starting wage for each position to a maximum of 6 million won. Accordingly, the initial wages of LG Electronics employees and senior and responsible positions have increased by 3 million won, 5 million won and 6 million won respectively compared to the previous one. The increased wages are applied from the March salary.
LG Electronics’ decision to raise its salary this year is interpreted by taking into account the fact that IT companies are making a huge increase in annual salaries and the launch of a third union centered on office workers in the company. In fact, it is reported that the labor union demanded a 11.2% increase in wages prior to the wage negotiations as employee dissatisfaction, which felt deprived by the lower salary compared to the industry, increased.
An official in the industry explained, “LG Electronics decided to raise wages to a higher level than in previous years, and it seems that it is to increase the morale of employees who made the highest performance last year and to strengthen their wage competitiveness.
Meanwhile, on this day, it was decided to increase the average of 6.5 to 7% of wages based on skilled workers through a collective bargaining agreement. This is the highest level since the early 2010s, when wages were raised by close to 10% due to the booming display industry. Last year, the rate of wage increase was only 1.9%.(Refer to our exclusive article on March 18, 2021)
LG Display’s agreement on a record-breaking wage increase is because it achieved a surplus for two consecutive quarters in the second half of last year and drastically reduced the size of its annual deficit. LG Display has been in the red for six consecutive quarters since the first quarter of 2019 due to the deteriorating liquid crystal display (LCD) business. However, with the prolonged Corona 19 last year, the demand for information technology (IT) devices increased and the organic light-emitting diode (OLED) business transition was accelerating, which resulted in a turnaround in the third quarter (164.4 billion won). In the fourth quarter (685.5 billion won), the surplus expanded.
LG Display’s annual deficit last year was 29.16 billion won. It is analyzed that the company attempted to motivate its employees through a large wage increase, as the deficit was reduced by 98% compared to the previous year, and the annual operating profit was expected to turn to a surplus this year.
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