Korea's minimum wage increase to take effect Wednesday

The 2020 minimum wage will be 8,590 won an hour. Gettyimagesbank

By Jung Min-ho

Korea's minimum wage increase will go into effect on Wednesday (Jan. 1).

Next year's minimum wage will be 8,590 won ($7.4) an hour, up from 8,350 won.

In July, the Minimum Wage Commission, made up of experts and representatives of labor and business, decided to raise the minimum wage by 2.87 percent.

According to the commission, the new minimum wage is expected to affect more than 1.37 million workers across the country.

The government hopes the increase will improve the lives of people struggling with high and ever-increasing living costs.

Raising minimum could backfire for workers, some argue

The Moon Jae-in administration aims to boost the economy by increasing disposable workers' income, one of the key policies of his income-driven growth strategy.

But the idea has brought a strong backlash from small business owners, who say they have no choice but to hire fewer workers to stay afloat.

After raising the minimum wage rapidly in his first two years ― by 16.4 percent for 2018 and 10.9 percent for 2019 ― the government accepted business owners' opinions and decided to slow the pace. During his election campaign, Moon promised to raise the minimum wage to 10,000 won by 2020.