Heated Debates
The Ministry of Employment & Labor of South Korea announced on May 30 that the Minimum Wage Commission (MWC) holds a plenary session on June 1 in order to fix the minimum wage for next year.
The MWC consists of 27 members, divided into nine employers, another nine on the employee side and the rest from the public sector. A successful opening of the plenary session is still uncertain though because the nine on the employee side withdrew from the negotiating table last year and have yet to return to it. At that time, they claimed that the process of the plenary session should be made public and the method for electing the nine commission members from the public sector should be improved.
Besides, both the Korean Confederation of Trade Unions (KCTU) and the Federation of Korean Trade Unions (FKTU) declared in February this year that they would continue to boycott the commission for the same reasons.
According to the current Minimum Wage Act, the rate of increase in minimum wage is determined in view of workers’ cost of living, the wages of workers doing similar jobs, labor productivity, etc. The calculation of the cost of living and overall negotiation processes, in particular, are likely to lead to heated debates even if the labor community returns to the negotiating table.
With South Korean President Moon Jae-in having already promised to raise the minimum wage to at least 10,000 per hour by 2020, expectations are higher than ever for a significant increase in minimum wage. The ministry recently said that it would make efforts to comply with his promise, too. At present, the minimum wage in South Korea is 6,470 won per hour. It has to be raised by 15.6% each year for the promise to be kept.
The labor community has welcomed the news but employers are expressing concerns, claiming that such a rapid increase will backfire without measures for protecting small firms and businesses. According to them, these small firms and businesses account for more than 90% of those to be subject to the minimum wage adjustment.