World Economy

S. Korea Labor, Employers Split on Minimum Wage

S. Korea Labor, Employers Split on Minimum WageS. Korea Labor, Employers Split on Minimum Wage

The labor and employers communities in South Korea have reacted differently to next year’s minimum wage.

The five members of the Minimum Wage Council who represent labor and voted on the wage rate have expressed regret, saying that the 8,350 won ($7.40) hourly wage offers little hope to low-wage workers who have eagerly waited for an era of a 10,000 won minimum wage, KBS News reported.

In a statement Saturday, the council members representing the labor side explained that their proposal of 8,680 won was the lowest raise possible to achieve the 10,000 won hourly rate by the year 2020 as promised by President Moon Jae-in.

They also strongly criticized council members representing management for boycotting meetings.

Meanwhile, the Korea Employers Federation expressed “grave concern” over the new minimum wage, pointing at the difficult economic situation and weak employment.

An official at the Federation of Korean Industries said that a wage hike that exceeds productivity will undermine the competitiveness of Korean businesses.

The Korea Federation of Micro Enterprise also issued a statement and rejected the decision on the minimum wage. It criticized the council for making a unilateral decision without the presence of members representing employers.

The Korea Federation of SMEs blasted the additional wage hike despite public consensus that small firms are barely surviving due to the wage hike implemented early this year.

The Minimum Wage Council raised next year’s rate to 8,350 won per hour, up 10.9% from this year in a vote held early Saturday.

The Organization for Economic Cooperation and Development said in a report in May that raising the minimum wage “could also slow employment growth and weaken Korea’s competitiveness if not accompanied by productivity gain”.


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