Labor, management differ starkly over next year’s minimum hourly wage

By Kim Bo-gyung

Tensions rise as labor calls for higher minimum wage, while management appeals for freeze

  • Published : Jun 5, 2019 - 16:19
  • Updated : Jun 5, 2019 - 16:29

The Minimum Wage Commission under the Ministry of Employment and Labor held its first public hearing on next year’s minimum hourly wage, and representatives of labor and management put forward contrasting positions on the heated issue, the ministry said Wednesday.

Tensions between the two groups erupted last month after the new head of the commission, Park Joon-sik, said there was a “social consensus” that the minimum wage hike over the past two years had been “too steep.”

At the public hearing, participants representing laborers urged the Moon Jae-in administration to keep its pledge and raise the minimum wage to 10,000 won ($8.40) per hour.

Minimum Wage Commission head Park Joon-sik (back row, center) attends a public hearing on next year’s minimum hourly wage at the Labor Ministry’s Seoul office on Wednesday. (Yonhap)

Meanwhile, those speaking on behalf of small and medium-sized enterprises appealed for a lower minimum wage or at least a freeze, saying the rapid increase coupled with a poor domestic economy had taken a toll on their businesses.

South Korea raised its minimum wage to 8,350 won per hour this year, up 10.9 percent from the 7,530 won minimum in 2018. This came on the heels of a 16.4 percent on-year hike in 2018.

“The prevalent opinion among friends who work part-time is that it is impossible to make a living with the current minimum wage level,” said Park Jong-eun, who works part-time.

Echoing Park, labor union member Mo Yoon-sook, whose union represents female workers, said, “Most laborers who are impacted by the minimum wage are not subject to a step-by-step wage rise, so changes to the minimum wage are the only way to increase pay.”

“The current minimum wage level is far from enough for a family of four,” she said.

But SMEs calling for the minimum wage to be cut or remain unchanged argued that the recent rate of increase was not in alignment with domestic and global economic conditions.

“Some small businesses are responding to the minimum hourly wage increase by cutting down on employees and work hours, and many are also considering closing down their businesses,” said Lee Keun-jae, vice chairman of the Jongno district branch of the Korea Federation of Micro Enterprise.

Minimum Wage Commission chief Park and 21 officials representing labor, management and the public interest participated in the public hearing at the Labor Ministry’s Seoul office in northern Seoul.

The Korea Economic Research Institute predicted that 629,000 people would lose their jobs if the government were to raise the minimum hourly wage to 10,000 won by 2021.

The projection was based on the calculation that the de facto minimum hourly wage for 2021 would stand at 11,658 won when factoring in legal hours of paid rest, amounting to a surge of 80 percent compared with 2017.

Members of the Korean Confederation of Trade Unions’ North Jeolla Province division hold a press conference in front of the Jeonju Chamber of Commerce on Wednesday. (Yonhap)

Earlier this week, the Korean Confederation of Trade Unions held a press conference in front of the Korea Employers Federation, saying, “Chaebol that receive massive amounts in stock dividends and have reserves of 950 trillion won should bear the cost of raising the minimum hourly wage to 10,000 won.”

The Minimum Wage Commission is to hold public hearings in Gwangju and Daegu in the coming days in an effort to hear out diverse opinions.

“The public hearing was arranged to listen to various parties in the field. … We will try to reflect the different opinions in the minimum hourly wage discussion,” said Minimum Wage Commission chief Park.

The Ministry of Employment and Labor is on a tight timeline as it has to finalize the minimum hourly wage for 2020 by June 27 and Labor Minister Lee Jae-kap has to make a formal announcement by Aug. 5. 

By Kim Bo-gyung (