S. Korea to freeze public-sector wages for next year: sources

SEOUL, Oct. 29 (Yonhap) -- South Korea plans to freeze wages for public-sector employees for next year as part of efforts to overcome its deepening economic woes in the wake of the global financial turmoil, government sources said Wednesday.

According to officials at the Finance Ministry and other related agencies,
public-sector wages for next year will be frozen at the current levels and
additional recruitment plans will also be put on hold except in some "inevitable
cases."
The move comes as the nation is gripped by the fallout from the global financial
turmoil sparked by the collapse of major American investment banks last month.
The government is grappling to shield the local economy from the external shocks
with a raft of market stabilization measures.
The wage freeze and other belt-tightening guidelines will be approved at a
committee earlier next month where policymakers will discuss the 2009 budget for
the public sector, the officials said.
"Talks are underway to make a final decision, but opinions on the wage freeze and
the number of total employees outnumber the others," a Finance Ministry official
said. "If decided, at least 101 institutes including 24 state-run companies will
be obliged to follow the guidelines."
Last week, head of major banks and financial institutions issued a statement,
pledging that they will step up self reform efforts in return for the
government's US$100 billion worth of external debt guarantees and other market
stabilization measures.
The public sector has been frequently under fire for dragging its feet in reforms
and offering handsome pay and other benefits to its employees even while the
nation's economy is feared to slip into a recession.
As of end of 2007, South Korea's public sector had 259,159 employees on its
payrolls and they saw their wages increase around 3 percent last year, according
to the Finance Ministry.