Wages of North Korean Employees in Kaesong Industrial Complex Raised by 5%

Ministry of Unification spokesperson Kim Eui-do announced on June 9 that the governments of both Koreas agreed to raise the minimum monthly wage of the North Korean workers in the Kaesong Industrial Complex by 5 percent to US$70.35 starting from May.

Back in 2003, Seoul and Pyongyang had set the maximum wage increase rate for those workers at 5 percent a year. Since then, their salary has been raised by 5 percent in each August in most cases. The earlier-than-usual wage adjustment at this time is the result of North Korea’s demand for a 10 percent increase and South Korea’s adhesion to the principle.

Earlier this year, North Korea insisted that the wage be raised by 5 percent in March and August each because it remained the same last year due to the shutdown of the industrial complex. Seoul, in response, partially accepted the proposal in view of the business activities there while adhering to the existing principle.

The wage is calculated by adding overtime and holiday pays, bonuses and incentives to the minimum salary. The sum is approximately US$135 to US$150 for each of the 52,000 or so workers. Korean companies bear about US$87 million a year concerning the activities in the industrial complex. The increase in wage at this time is expected to result in around US$4 million flowing additionally into the North.