Moon recognizes need to adjust minimum wage pledge
President Moon Jae-in apologized for not being able to maintain his election pledge to raise the minimum wage to 10,000 won ($8.85) per hour by 2020 during a meeting with his aides at Cheong Wa Dae, Monday. This is the first time for the President to publicly admit to failing to fulfill one of his election pledges since he took office in May 2017.
Moon's apology came after the Minimum Wage Commission set the 2019 minimum wage at 8,350 won, Friday, up 10.9 percent from this year. The hourly wage was raised by 16.4 percent in January to 7,530 won, the largest increase in almost 20 years. "With the commission's decision, it has become difficult to achieve the goal of raising the minimum wage to 10,000 won by 2020," Moon said. "I apologize for not being able to keep my presidential election pledge."
Although Moon apologized, he did not back down on his minimum wage policy. He said the government will do its utmost to achieve the 10,000 won minimum wage at an early date. He underlined that the policy is a move in the right direction to raise the quality of life of low-income earners and boost consumption by increasing household incomes. Ultimately, the policy is aimed at economic growth and job creation. Moon also said the double-digit increase for the second consecutive year shows the commission's support for the policy.
His apology, however, was not enough to assure the self-employed and small merchants who have strongly opposed next year's increase. The Korea Federation of Micro Enterprises (KFME) is planning to organize large-scale protests in central Seoul.
Despite Moon's sincerity to advance the livelihoods of low-income families and improve the economy, the minimum wage hike has not resulted in the desired outcome. The latest statistics show weak growth in new jobs, while youth unemployment peaked at 10.5 percent in May. Even Finance Minister Kim Dong-yeon has acknowledged the negative impact of the minimum wage hike on some industries.
Minister of SMEs and Startups Hong Jong-hak held a meeting with the KFME Monday to hear their concerns. It is necessary for the Moon administration to apply more flexibility in pursuing the President's economic pledges and adjust the speed of the increase to respond to the concerns of small businesses, which are already reeling from the burden of this year's hike. The government should also actively carry out follow-up measures to protect small business owners, such as providing employment subsidies, adjusting credit card fees and monitoring malpractices of franchises.
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