Next year's minimum wage rise leaves many disgruntled

By Choi Sung-jin

In the run-up to the parliamentary elections in April, both ruling and opposition parties pledged to raise the minimum wage to 10,000 won ($8.8) an hour, immediately or gradually.

Labor unions’ expectations also rose that workers would be able to get at least a double-digit raise this year. On Saturday, however, a trilateral committee decided to raise next year’s minimum wage by 440 won, or 7.3 percent, from this year to 6,470 won ($5.69) an hour.

Out of the total 27 members – nine each from the labor, management and public interests – of the minimum wage committee, only those representing employers and public interests took part in the yes-or-no vote. All of the nine members representing the labor walked out in protest to the increase even smaller than this year’s 8.1-percent hike.

The committee held 14 meetings this year, more than ever before, reflecting heated arguments between employers and employees. Unlike in the past when both sides presented several counterpropositions, they stuck to their respective original proposal of 10,000 won per hour and 0 won. And as were the cases in seven of the past 10 negotiations, members representing public interests decided it, by compromising between the two extremes.

Park Joon-sung, the committee’s chairman, said, “Although next year’s raise is a little smaller than this year’s, the committee did its best to narrow the widening income gap in labor markets.”

But the union said next year’s minimum wage, equivalent to 1.35 million won in monthly salary provided they work 40 hours a week, falls far short of the 1.67 million in the actual cost of living for a single worker, as it failed to reflect the rise in living expense in the past year.

In reality, however, there are 2.64 million workers, or 13.7 percent of total wage earners, who do not receive the legal minimum wage in large part because of the government’s leniency toward employers who violate the rule, according to a report by Kim Yu-seon, a researcher at Korea Labor and Society Institute.

The current law calls for sentencing violators to a maximum prison term of three years or fines of up to 20 million won. Out of the total 32,997 violators ferreted out from 2011-2015, only 64 were prosecuted, however. That is because employers have only to pay back wages to avoid legal punishment.

Also problematic is the operation of the three-way committee. Out of the total 27 members, it has almost always been the nine members representing public interests that have the casting ballots when the labor and management are at loggerheads.

The government recommends and appoints all of the nine members who are supposed to remain neutral but end up taking sides with the management at the behest of the government, however, the experts said.

To rectify this unfair practice, they added, the nation needs to either diversify the recommendation of public interest members or make the National Assembly determine minimum wages, they added.