Wednesday, February 19, 2020
South Korea Refuses North Korea's Unilateral Decision to Raise Wages for Workers in the Kaesong Industrial Complex
Wage Increase Request Denied
South Korea Refuses North Korea's Unilateral Decision to Raise Wages for Workers in the Kaesong Industrial Complex
  • By Jack H. Park
  • February 27, 2015, 10:53
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Model Industrial Complex factories in Kaesong (Gaesong) Industrial Area. (photo courtesy of Mimura/Wikimedia Commons)
Model Industrial Complex factories in Kaesong (Gaesong) Industrial Area. (photo courtesy of Mimura/Wikimedia Commons)

 

The Ministry of Unification announced that it would refuse North Korea's unilateral decision three days ago to increase the minimum monthly wage of North Koreans working in the Kaesong Industrial Complex from US$70.35 to US$74 next month.

Lim Byung-cheol, spokesman for the Ministry of Unification, said on Friday, “if the North has the willingness to develop the Kaesong complex, it should refrain from acting in unilateral manners.” He added, “Kaesong Complex issues, including wages, should be resolved through consultation between the two nations.”

Two months ago, the North said that it would not be bothered by the practice of gradually increasing the wage by 5 percent or less each year. Under the circumstances, companies in the industrial complex were expressing concerns over an increase in labor cost. 

The minimum wage started from US$50 and has reached US$70.35 through a 5 percent yearly increase since 2007. It was even raised during the temporary shutdown of the complex in 2013. In addition, the actual monthly wage adds up to approximately US$250 when allowances and benefits are taken into consideration.

Adding to the concerns is the social insurance fee. At present, the South is supposed to give 15 percent to the North as the fee. However, the North is demanding that the percentage be applied to the total base pay and living expenses for the workers. In this case, the wage increase rate would go up further.