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[Voice] Is the minimum wage high enough?

With the government under pressure to increase both employment and living standards ...

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Published : 2013-09-09 20:28
Updated : 2013-09-09 20:29

Four subway rides, a newspaper and packet of cigarettes, or one Big Mac: That is what a minimum-wage worker can buy after an hour on the job, and have change of a couple of hundred won. The minimum hourly rate of 4,860 won, due to rise to 5,210 next year, amounts to 1.08 million won a month for a 40-hour work week. Differences in purchasing power make comparison between countries difficult, but the nation’s rate ranks on the low end of the scale among wealthy nations. In 2011, just eight of the 23 OECD countries aside from Korea had a lower hourly minimum. Many of those countries with higher rates, however, also have significantly higher GDPs per capita. Nonetheless, whether the current wage is reasonable depends very much on who you ask. Neither employers nor labor groups expressed satisfaction with the most recent increase for 2014, the former having called for an outright freeze, the latter a rise of more than 21 percent.

“It is very hard to pin down whether the minimum wage is high or low. It is somewhat relative,” Woo Seok-jin, an economics professor at Myongji University in Seoul, told The Korea Herald. “We have some minimum living standard costs, and the minimum wage should be determined based on that level.”

Whether the current rate meets such a standard is a matter of debate. Park Jeong-woo, a 20-year-old music student at Seoul National University of Arts, has worked numerous minimum wage jobs such as a convenience store clerk alongside his studies. Even though he avoids rent by living with his parents, he still finds the current rate to be out of synch with the rising cost of living. 
Members of a labor union for part-time workers protest for a higher minimum wage in Seoul last month. (Yonhap News)

“As public utility prices rise I think the minimum wages of part-time jobs like at convenience stores should be increased. … I think 6,000 won would be okay,” said Park.

“I am actually living with my parents but I am trying to get independent from my parents, so I am making my own money and still it is really hard to live with the minimum wage.”

Park added that managers often failed to pay what workers were owed, such as overtime for extra work. He said bosses saw additional hours as simply being favors from workers, even when shifts dragged on for as long as 14 hours.

“I think the government ministers don’t know how the people who live like us work hard and how they get such low wages,” he said.

The 27-member Minimum Wage Council, composed of representatives of employers, employees and the government, is responsible for proposing the actual rate each year, with the final decision in the hands of the Ministry of Employment and Labor. Some civic activists, however, believe this process deserves greater scrutiny. Kim Nam-hee, a member of the labor and welfare team at People’s Solidarity for Participatory Democracy, said important voices were being left out of discussions on the wage.

“As always, related organizations are currently in the process of several movements and campaigns. We are also looking to question the standards on how the minimum wage is deliberated as well as the process of how council members are being chosen for. We often feel we aren’t being justly represented and our opinions not properly heard,” said Kim.

“It is our opinion that the income disparity in Korea is excessive and in comparison to current prices, naturally the minimum wage still needs to be higher.”

Some business representatives, however, claim that raising the rate risks hurting not just firms, but workers as well by forcing the companies to lay off workers or reconsider new hires. Park Pil-kyu, a senior research fellow at the Korea Small Business Institute, said raising the rate would hit small businesses particularly hard.

“A rise in the minimum wage is likely to have a negative effect on employment of Koreans because it is likely to replace Koreans with foreigners in ‘vulnerable jobs’ at small companies,” said Park, adding that his views did not necessarily represent those of his organization.

Some free market advocates take this argument further still ― they say the minimum wage shouldn’t be frozen or lowered, but abolished altogether.

“It prices low-skilled workers out of the market with a forced arbitrary wage set by third-party people who don’t pay those wages, while it also adds yet another government-imposed cost on small companies already struggling to survive,” said Casey Lartigue, a former scholar of the U.S.-based Cato Institute and Seoul-based Center for Free Enterprise, and current international adviser to Freedom Factory Co.

Lartigue said the government should do less, not more, to help job seekers and the lowest-paid workers get a leg up.

“According to some estimates, 75,000 to 100,000 jobs could be created if the Korean government reduced regulations on business and barriers to entry,” he said.

“A new report by the World Economic Forum says that Korea’s competitiveness has fallen. The government creating a hospitable environment for business would do more for the poor ― and society in general ― than the constant unfunded mandates on business.”

The negative effects of the minimum wage has long been a hotly contested subject, with economists offering conflicting opinions.

While describing it as “economics 101” that the minimum wage killed jobs, Woo said that some research on the issue in recent decades had produced results to the contrary. He referenced a 1992 study by Princeton University economists David Card and Alan B. Krueger that found no evidence of increased unemployment following a $0.80 rise in the minimum wage of New Jersey.

“If the market is not competitive, that is if a market is a monopoly or oligopoly or at least there are few firms in the market, minimum wage can increase employment more … So there are two competing theories, depending upon the industry organization of the market,” he said.

“When it comes to the Korean market, a lot markets are oligopolies, that means there are two or three firms, or not many firms. So from the principles of the labor market, in Korea, the minimum wage can actually increase employment without killing many jobs.”

By John Power (john.power@heraldcorp.com)

Chun Sung-woo and intern reporter Kim Joo-hyun contributed to this article. ― Ed.

Minimum wage ...

Of course the gap between rich and poor is too high. It would be ideal if South Korea focused more on the poor instead of making life easier for those who already have it easy, such as with higher taxes on the rich, so that the government can spend more on those who really need it. However, I do understand the problem with raising the minimum wage because there are way too many people working for minimum wage.

― Jonte Hee Soo A, Suwon, via Facebook

Euthanasia ...

The morality of euthanasia has been widely debated for years and it continues to be the focus of intense debate among health care professionals. Some people support the idea of euthanasia, claiming that euthanasia gives the right to clients to make autonomous choices and to choose how they wish to end their lives without suffering. However, I am firmly against euthanasia.

Arguing against euthanasia does not mean that I do not respect the choice of individuals who choose euthanasia. Don’t get me wrong. Why should a person not be free to choose to continue their lives or to end their lives where their autonomy is fully respected? That being said, should a physician or third party have the right to practice euthanasia? Legalizing euthanasia means putting the power over life and death in the hands of doctors and this can lead to potential damage of client’s autonomy. We human beings are not free to do things which limit or violate the reasonable freedoms of others. Hence, no one has the right to help someone to die. The acceptance of euthanasia does not respect one’s autonomy and it should not be legalized.

Legalizing euthanasia can also adversely affect the priority placed on palliative care. I believe that modern medicine is making advances all the time to develop treatments for the terminally ill. If euthanasia is to be legalized such that our focus moves from curing to euthanasia, and the medical research would put more efforts on developing “euthanasia skills,” at the expense of treatment and symptom control. Such unethical practices should not happen. There is always an alternative to euthanasia and it is important to inform clients what kind of options they can have to treat their pain. If improved access to adequate hospice and palliative care can help manage their pain and change their view toward life, thus obviating need for euthanasia, clients will not persistently request euthanasia. Caring for a dying client requires support and the best possible care to ensure that their pain and symptoms are managed, and their life is treated as sacred until its natural end, not in euthanasia.

― Han Yeo-jin, Yangyang, Gangwon Province