Both labor and business communities in South Korea on Saturday expressed dissatisfaction with the country's minimum wage set for 2019.
The Minimum Wage Council -- a panel comprised of representatives from labor, management and the general public -- announced that South Korea's minimum wage for next year has been set at 8,350 won (US$7.37) per hour, up 10.9 percent from this year, after a 19-hour discussion.
The representatives for the labor circle have demanded a 43 percent increase to 10,790 won, while those for the business side have called for a freeze.
The 10.9 percent increase is smaller than the previous minimum wage hike. This year's minimum wage stands at 7,530 won per hour, up 16.4 percent from a year ago, the biggest hike in nearly two decades.
Labor representatives walk out after a vote on the minimum wage for next year on Saturday. (Yonhap)
With management members boycotting, minimum wage proposals from the labor side (8,680 won) and the general public group (8,350 won) were put up for a vote, and the latter earned eight votes to be selected as the minimum wage for 2019. After voting results turned out against what they favored, five council members from the labor circle expressed their concerns.
"We deeply regret that the decision couldn't deliver hopeful results to low-wage workers who have been waiting to see the era of
10,000 won minimum wage and supplementation to the minimum wage calculation changes," the members said in a statement after the council's decision.
Those representing management voiced that such a decision will ruin small businesses. They added that the council members from labor and the general public sides will need to be responsible for all the problems occurring from the minimum wage hike.
"Despite a difficult economic situation and worsening employment conditions, we saw the minimum wage increase more than
10 percent," the council members from the management side said. "To lessen the impact of a minimum wage hike, we insisted on a selective application based on each company's financial situation, but this wasn't approved. We're deeply worried that this decision will impact the existence of medium and small businesses in the country."
Owners of mom-and-pop stores called for a "moratorium" and said they're considering a collective boycott, such as shutting down their businesses temporarily, to show their resistance to the decision.
The Korea Federation of Micro Enterprise said convenience store owners' average monthly profit was 1.95 million won in 2017, but following a minimum wage raise, it decreased to 1.3 million won this year, and their profitability will further go down with another two-digit percentage hike.
Korea Employers Federation and the Federation of Korean Industries, two local business lobbying groups, also expressed their concerns, saying an increase in labor costs will dampen the competitiveness of South Korean firms. (Yonhap)