Low minimum wage costs youth dreams

Gu Gyo-hyeon, president of Arbeit Workers Union

By Kim Jae-won

Gu Gyo-hyeon, president of Arbeit Workers Union, a labor union representing part-time workers, said that its members cannot plan for their future with the minimum wage as low as it is.

Korea’s minimum wage is 5,580 won per hour this year. Last month, the government-led Minimum Wage Committee decided to increase it 8.1 percent to 6,030 won next year.

“The number of young jobseekers is 600,000, and most of them are part-timers. With the still-low minimum age, they cannot dream of an alternative life,” Gu said.

He said it should be raised to 10,000 won per hour so they can think about their futures.

Gu said the government introduced measures to create more jobs for young people, but most of them are useless. Recently, the Ministry of Strategy and Finance announced it will give companies tax credits up to 5 million won for each person aged between 15 and 29 they hire.

“I don’t think companies hire young people because of 5 million won. Policies should be focused more on structural reform, such as narrowing the wage gap between big companies and small and medium-sized enterprises.”

He also criticized the government for simply trying to reduce the jobless rate rather than seeking to tackle structural problems.

According to data from Statistics Korea, the youth unemployment rate reached 10.2 percent in June from 9.3 percent in May. The number of the unemployed people between 15 and 29 increased 43,000, or 10.6 percent, to 449,000 during the same period.

Observers say the real youth unemployment rate is much higher than the official figure. Experts warn that the “lost generation” will be a disaster for society if opportunities to work are not provided for them.

The Park Geun-hye administration seeks to create more jobs for young people by cutting wages of permanent workers with a peak wage system which reduces salaries of workers when they reach a certain age.

However, the union leader said the system will guarantee that companies save money but he is not sure they will use the money to hire young jobseekers.

“Big companies reserve cash, but they are reluctant to use it for human resources. I wonder for whom the system is introduced.”