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Management, labor express disappointment
By Jhoo Dong-chan
A government body has raised the 2016 minimum wage by 8.1 percent to 6,030 won ($5.31) per hour, a decision that satisfied neither the unions nor management.
The Minimum Wage Council announced Thursday it has increased next year's hourly minimum wage by 450 won from this year's 5,580 won, which will affect an estimated 3.42 million workers in Korea.
The increase means a monthly salary of 1.26 million won for people who work 40 hours a week, or 209 hours per month.
The council, comprised of 27 members with nine representatives each from labor, management and the public sector, voted for the new wage level following months of negotiations. Wednesday's meeting was the 12th session devoted to making the change.
Initially, representatives from labor demanded 10,000 won, up 79.2 percent from this year's minimum wage, while management proposed a freeze.
Both labor and management strongly opposed the final decision.
The labor side claimed 6,030 won is still too low to narrow the nation's income disparity.
Officials from umbrella unions said they expected at least a double-digit raise.
"The government said it would revitalize the domestic market by raising the minimum wage, but the increase is too low. We were disappointed," Kang Hun-jung, spokesman for the Federation of Korean Trade Unions, said.
The Korean Confederation of Trade Unions also said the government betrayed workers' expectations and it would protest the decision in a general strike scheduled for July 15.
Management representatives complained that an 8.1 percent raise was unprecedentedly high and would put too much of a burden on payroll expenses, especially among small companies amid the depressed economic climate after the Middle East Respiratory Syndrome outbreak.
"The decision neglected the nation's tough economic conditions," the Korea Employers Federation said in a press release.
"Small- and medium-sized businesses will face severe labor costs next year. Many of them could face bankruptcy. We expect small companies with less than 30 employees to pay an additional 2.7 trillion won per year."
Both management and labor can raise an objection to the decision over the next 20 days. Afterward, the Ministry of Employment and Labor will finalize the amount and announce its decision on Aug. 5. The umbrella unions confirmed they would raise an objection during this period.
The 8.1 percent hike in minimum wage came after a marathon meeting among council members.
Both sides failed to reach a compromise, and the negotiations passed the legal deadline of June 29.
During the additional plenary sessions, the two sides remained bitterly divided, with workers' representatives demanding 8,100 won and management 5,715 won.
Representatives of the public sector proposed a wage between 5,940 to 6,120 won as a settlement.
Unhappy with the negotiations, the nine representatives of labor left the meeting Tuesday and did not show up for Wednesday's session. The public sector representatives then proposed 6,030 won and the remaining council members voted in favor.
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