2nd LD) S. Korean conglomerates to cut wages for college graduates

(ATTN: RESTRUCTURES; TRIMS throughout; ADDS plans by Samsung, LG in paras 6-7)
SEOUL, Feb. 25 (Yonhap) -- South Korea's top 30 business conglomerates have
agreed to reduce the wages of newly hired university graduates in an effort to
stabilize the job market, the nation's largest business lobby said Wednesday.
Chung Byung-cheol, vice chairman of the Federation of Korean Industries (FKI),
said the savings from wage cuts will be used to hire more interns and part-time
workers.
The business conglomerates -- including Samsung, Hyundai Motor and LG -- will
slash salaries for their new employees by as much as 28 percent, the FKI said in
a statement.
"Businesses wisely agreed to lower wages to overcome the serious crisis in
employment," said Chung.
On the same day, Samsung Group, the nation's largest conglomerate with Samsung
Electronics Co. under its wing, said its affiliates will slash starting salaries
for graduates hired this year by 10 to 15 percent.
LG Group, the parent of LG Electronics Inc., said its subsidiaries will reduce
wages for graduates by five to 15 percent.
The government, for its part, said last week it will cut salaries for college
graduates at 297 state-run companies.
South Korea's economy, Asia's fourth-largest, is widely expected to fall into its
first recession in 11 years as it is hammered by the global economic crisis.
The government has predicted the economy will shrink by two percent this year.
The International Monetary Fund, however, is more pessimistic with a forecast a
4-percent contraction and Swiss brokerage firm Credit Suisse is predicting a
contraction of as much as 7 percent.
In the final quarter of 2008, the Korean economy contracted 3.4 percent from the
same period a year ago, the Bank of Korea said.
For all of last year, the Korean economy expanded just 2.5 percent, compared with
5.1-percent growth in 2007.
Still, the nation's jobless rate stood at a relatively stable 3.3 percent in
January, but analysts say the number does not fully reflect the weak status of
the economy.
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