Why is wage growth in Korea so weak?

The recent weakness of wage growth in Korea seems at odds with the country’s low unemployment rate. But a closer look at the data suggests that the unemployment rate is overstating the health of the labour market and, on top of that, compositional changes have depressed average wage growth. More to the point, wage growth is likely to remain subdued (in both nominal and real terms) in the coming quarters and it shouldn’t present a significant inflation threat.