Upon the agreement, the ruling Saenuri Party asserted that the increase was modest enough to avoid job losses from businesses burdened with higher costs.

“Considering the nation’s economic status and negative repercussions brought on by a dramatic increase in the minimum wage, we appreciate them having made a difficult decision. We should set aside unnecessary debate and join forces to reinvigorate the economy,” said the Saenuri Party’s spokeswoman Rep. Kim Hyun-ah.

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The conservative party also shared the concern among businesses that a higher minimum wage would harm the nation’s economy. The party’s chief policymaker Rep. Kim Gwang-lim urged high-income earners to avoid demanding pay increases and help with creating jobs.

The Korea Employer Federation said Saturday that the 7.3 percent increase would add more uncertainty to the nation, which is already suffering from business restructuring and the United Kingdom’s decision to leave the European Union.

Small and medium business also voiced concern about the decision. The Korea Federation of Small and Medium Entrepreneurs warned Saturday that some SMEs might be unable to apply the rule as the new wage might be beyond their ability to pay.

The opposition parties expressed concerns that the hike is too meager to address the widening gap between the rich and poor, and to help those below the poverty line make ends meet. They urged the government to seek at least a two-digit increase in the minimum wage.

“The purpose of setting the minimum wage is to build a safety system to offer a basic livelihood,” said the main opposition The Minjoo Party of Korea’s spokesman Rep. Ki Dong-min. “But it is a shame that the increase rate is even below that of last year,” he said.

The opposition party said that a two-digit increase would help bring the 10,000-won minimum wage to the nation by 2020 and that the government should come up with separate measures to lift the burden off self-employed workers and small businesses.

The Federation of Korean Trade Unions, one of the nation’s two largest labor unions, criticized the move, saying that the 7.3 percent increase was lower than expected and blaming the government for neglecting the worsening living conditions of low-income workers. 

By Yeo Jun-seok (jasonyeo@heraldcorp.com)