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Finance Minister Nominee Pledges to Change Minimum Wage Determination Method
Expressing Concerns about Rapid Hike
Finance Minister Nominee Pledges to Change Minimum Wage Determination Method
  • By Jung Suk-yee
  • December 5, 2018, 09:49
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Deputy prime minister and finance minister nominee Hong Nam-ki answers questions from lawmakers during his confirmation hearing on Dec. 4.

Deputy prime minister and finance minister nominee Hong Nam-ki said on Dec. 4 that he would change the method to determine the minimum wage for 2020 and beyond, expressing concerns that the planned 10.9% increase in the minimum wage for the next year would deliver a shock to the market.

"I think it is meaningful to employ a dual method in which the Minimum Wage Committee determines a minimum wage within the bounds set by the government based on various indicators and payment ability" Hong said during his confirmation hearing at the National Assembly.

At the moment, the minimum wage is decided by the Minimum Wage Committee and the Ministry of Employment and Labor accepts and announces it. "I think a steep hike in the minimum wage has an impact on worsening income distribution," Hong said. "It will be difficult to differentiate minimum wages based on region, industry and employee nationality."

Referring to the flexible working hour system, Hong said the unit period of the system needs to be extended to six months from the current three. “The matter should be determined after enough discussions at the Economic, Social and Labor Committee.”

Hong also hinted that he would further strengthen innovation-powered growth. "In the current situation, innovation-powered growth outweighs income-driven growth," Hong said.