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Labor unions call for minimum wage rethink

South Korea‘s two largest trade unions asked the Ministry of Employment and Labor on Thursday to reconsider next year’s minimum wage, taking issue with what it called the “illegal” procedure of setting the rate.

The labor unions -- the Korean Confederation of Trade Unions and the Federation of Korean Trade Unions -- said that next year‘s minimum wage has no legitimacy as the labor circle did not participate in the vote to decide the rate at the final meeting on July 9.

The move came as the government offered a 20-day period for both labor and management to express their objections before making public the agreed minimum wage for next year on Aug. 5.

Members of the nation's two largest labor unions -- the Korean Confederation of Trade Unions and the Federation of Korean Trade Unions -- hold a press briefing to urge the Ministry of Employment and Labor to reconsider the minimum wage rate for next year on Thursday, Sejoing. (Yonhap)
Members of the nation's two largest labor unions -- the Korean Confederation of Trade Unions and the Federation of Korean Trade Unions -- hold a press briefing to urge the Ministry of Employment and Labor to reconsider the minimum wage rate for next year on Thursday, Sejoing. (Yonhap)
“Korean workers cannot accept next year’s minimum wage that has been decided in an illegal way,” said Lee Byung-kyoon, head of the FKTU, in a news briefing held in front of the ministry building.

“It is against the law that the remaining members of the Minimum Wage Council did not even ask the laborers to be present at the final meeting and concluded it by voting on the proposal without us,” he added.

The Minimum Wage Council, a trilateral committee of employers, employees and labor experts, set the hourly minimum wage for next year at 6,030 won ($5.25), up 8.1 percent from this year‘s rate of 5,580 won, after weeks of fierce debate.

The nine laborers’ representatives did not return to the final negotiations after they walked out in opposition to the disappointing extent of the hike proposed by labor experts in the council. Labor experts had made the proposal for the sake of a breakthrough in the dragged-on meeting.

The 8.1 percent hike is also being resisted by the employers’ representatives, who say that such a “drastic increase” would take a toll on small and medium-sized businesses. However, they have yet to officially call on the ministry to reconsider the minimum wage.

Regarding the labor unions’ complaints, the ministry maintained that there is no problem in the legal procedure as the labor bloc voluntarily exited from the meeting twice.

The Minimum Wage Act stipulates that at least one-third of representatives from trade unions and employers should cast a vote to decide the minimum wage. But if one party refuses to attend the negotiations more than once, the vote can go ahead without that party.

In a press briefing, the unions also released a survey by Hangil Research of 1,000 workers in which 75.3 percent of the respondents said that next year‘s minimum wage would still be insufficient. Only 7.9 percent said it was enough, the poll showed.

Nearly 35 percent thought that next year’s wage rate was largely influenced by employers, followed by the government and politicians at 25.5 percent, workers at 18.3 percent and public sentiment at 12.8 percent.

Six in 10 respondents were in favor of raising the minimum wage to 10,000 won, the rate the labor bloc initially suggested, according to the poll. 

Talks among employees, employers and labor experts collapsed several times due to continued clashes over the extent of the hike, failing to meet a June 29 legal deadline.

The labor unions initially demanded a 79 percent rise from the current minimum wage at 5,580 won to 10,000 won, arguing that the hike would curb the nation’s income inequality and boost consumer spending.

Employers campaigned for a freeze, citing possible job losses and soaring production costs, especially for smaller companies.

Since the government adopted the minimum wage in 1989, the Minimum Wage Council has set the minimum wage through discussion. This year, the discussion began in early June.

By Ock Hyun-ju (laeticia.ock@heraldcorp.com)
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