Talks to set next year’s minimum wage for workers in South Korea began Thursday, with a tough road ahead amid fierce clashes between workers and employers.
It was the first meeting of the Minimum Wage Commission to adjust the lower limit of wages, currently at 6,470 won ($5.75) per hour, after President Moon Jae-in was sworn in with a promise to raise it to 10,000 won by 2020.
The commission comprises of 27 representatives of businesses, workers and the government.
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Workers walked out of the negotiating body in July last year, complaining of the “unilateral” manner of government representatives setting the rate. But they decided to return to the negotiating table with expectations for a drastic hike under the Moon administration.
AT Thursday’s meeting, the representatives drew a timeline to set the rate and chose Uh Soo-bong, a professor from Korea University of Technology and Education, as the commission’s chief. His tenure ends on April 23 next year.
The talks should be finalized by June 29 before the Ministry of Employment and Labor officially announces next year’s minimum wage rate on Aug. 5.
The current minimum wage level translates to 51,760 won a day and 1.35 million won a month for those who work eight hours a day. It marked a 7.3 percent rise from the previous year.
It is possible for the Moon administration to achieve the 10,000-won minimum wage by raising the rate 15.7 percent per year for the next three years, which is likely to face strong resistance from employers.
The Korea Employers Federation has claimed the minimum wage has risen too quickly and needs to be stabilized, expressing concerns over possible job losses. They also say the hike would lead to soaring production costs and take a toll on businesses, especially smaller ones.
The nation’s trade unions have maintained that the minimum wage should be dramatically raised to curb the nation’s income inequality and improve living conditions for low-income workers. They believe the wage hike would result in boosting consumer spending, which would in turn revitalize the faltering domestic economy.
Since the government adopted a minimum wage in 1989, the Minimum Wage Commission, a 27-member trilateral committee of employers, employees and labor experts including labor-related government officials, has annually set the minimum wage through the negotiating body.
By Ock Hyun-ju (laeticia.ock@heraldcorp.com)