ED New minimum wage

Next year’s minimum wage has been set at 7,530 won ($6.64), up 1,060 won or 16.4 percent from this year. Using the new hourly wage, one can expect to earn 1.57 million won a month for working eight hours a day, 40 hours a week.

Government measures are expected to ease the concerns facing small-time employers significantly. It is good news for hundreds of thousands of people who rely on part-time jobs for their livelihoods. There have been claims that a big rise in wages could backfire because employers, often small-time operations like convenience stores, would feel so squeezed that they would reduce hiring. This would boomerang back on the workers the wage increases are meant to help.

The raise was finalized in a vote between the labor side proposal of 7,530 won and management‘s 7,300 won. Management representatives had initially offered 6,625 won, up 2.4 percent. It was a majority decision of the wage-setting committee _ 15 for and 12 against with no abstentions.

It is the first double-digit increase in 11 years and the biggest since 2000. The government, a liberal one focused on distribution, has promised to raise the hourly minimum wage to 10,000 won by 2020.

It is meaningful that management increased its offer to help make the agreement possible.

It is not uncommon for owners of convenience stores, for example, to stop hiring part-timers, for fear they will be unable to make ends meet if they have to pay higher wages. The government’s measures include a direct subsidy to cover fully the extra rise in wages that will come above the average 7.4 percent increase of the past five years. The upper limit of an increase in rents and deposits for a store will be lowered from the current 9 percent.

The Fair Trade Commission is addressing the unfair practices of franchiser firms over franchisee outlets. BBQ Chicken and other industrial leaders are accused of overcharging outlets for raw materials, maintenance and advertising, contributing to reducing hiring. It is important for all parties to help the higher wages take root without side effects.