Bahk Eun-ji has been with The Korea Times since 2012, building a career across multiple desks. She began at the Business Desk, where she conducted in-depth interviews with key figures in Korea's corporate world. Later, she moved to the Politics & City Desk, focusing on education policy and social affairs. She later served as team leader of the digital content team, leading curation efforts on the newspaper’s homepage and reshaping print stories for social media audiences to enhance digital reach. Now back on the Politics Desk, she covers the National Assembly and the Ministry of National Defense, with a renewed focus on political developments.
Korea to raise minimum wage for 2020 by 2.9%
The screen shows the result of a vote for the minimum wage for next year, set at 8,590 won, at a meeting of the Minimum Wage Commission at Government Complex Sejong, Friday. Yonhap
By Bahk Eun-ji
By Bahk Eun-ji
The minimum wage for next year has been set at 8,590 won ($7.3) per hour, a 2.9 percent increase from the current 8,350 won, and the third lowest rise since the nation adopted the wage system in 1988.
This reflected complaints from small businesses that the steep increases over the last two years have put huge financial pressure on them amid a sluggish economy
The relatively small rise has also made it impossible for President Moon Jae-in to achieve his campaign pledge of raising the wage to 10,000 won by 2022, the last year of his term.
Early Friday morning after 13 hours of final negotiations, the 27-member Minimum Wage Commission, a trilateral panel composed of nine representatives each from labor, management and the public, voted on the wage rise rate.
Between 8,590 won and 8,880 won proposed by the management and labor, respectively, 15 selected the former, while 11 voted for the latter, with one abstention.
The 2.9 percent increase is the lowest under the Moon administration ― compared to 16.4 percent in 2018 and 10.9 percent this year.
The minimum wage is the lowest possible hourly pay a local worker is entitled to receive.
The lowest growth rate in a decade reflects numerous complaints that the rapid increases in the last two years have led to small businesses firing employees or reducing their operating hours, rather than the original goal of boosting consumption.
As concerns were raised not only by business lobbies but also politicians ― even among officials of the ruling bloc ― the Moon government signaled flexibility in achieving the 10,000 won pledge.
“This is the result of self-reflection on our difficult economic situation,” Park Joon-shik, head of the council, said in a briefing at the Government Complex Sejong after the decision. “It reflected the consensus for the need for a flexible response to the situation.”
Under the law, the labor minister will finalize and announce the wage level by Aug. 5 following the commission's decision. Until that time, those opposing the decision can request a review.
Unions, which were not satisfied with the 8,590 won rise, said they will make such a request.
The Federation of Korean Trade Unions called the increase a “disaster,” saying it was the lowest rise since the 2.7 percent set in 1998 following the Asian financial crisis, and 2.75 percent in 2010 after the global financial crisis.
“The Moon government's campaign to respect labor, realize a 10,000 won minimum sage, and resolve economic polarization has become hollow,” it said in a statement.
The Korean Confederation of Trade Unions also vowed to fight the decision, which it said was virtually a reduction in the minimum wage.
“The agreement is the administration's declaration to abolish its income-driven growth,” the umbrella union said in a statement.
The business circle, which hoped to reduce or at least freeze the minimum wage, said the 2.9 percent rise was regrettable but seemed inevitable.