Go to Contents Go to Navigation

Labor, management kick off talks to set next year's minimum wage

All Headlines 14:13 April 07, 2016

SEOUL, April 7 (Yonhap) -- South Korea's labor and management representatives kicked off talks Thursday to set the mandatory minimum wage for next year.

The Minimum Wage Council that also includes delegates from the public sector is tasked with jointly setting the wage level and the extent of its application for 2017. The three groups at the talks each send nine delegates who will set the new minimum wage.

The minimum wage level is the lowest possible pay a local worker is lawfully entitled to receive. Employers who violate the law can be jailed up to three years or pay a maximum of 20 million won (US$17,300) in fines.

The council usually comes up with a result after about three months of deliberation.

Last year, it set the minimum wage for 2016 at 6,030 won per hour, an 8.1-percent increase from a year earlier. Talks that started in April lasted until July.

Intensive negotiations are expected for this year as other countries move to raise the minimum wage. Pledges made by politicians are expected to fuel debate for steeper hikes.

The state of California has decided to raise the minimum wage to $15 per hour by 2022, while White House hopeful Hillary Clinton and her rival Bernie Sanders stressed they would increase the federal minimum wage.

The British government decided to raise the minimum wage to 9 pounds (US$13) by 2020. Russia will raise its minimum wage by 20 percent starting from July.

"Countries around the world are all raising the minimum wage in an effort to boost domestic consumption by expanding the earnings of low-income groups," said the spokesman at the Federation of Korean Trade Unions (FKTU), the country's largest umbrella union. Others like the Korea Confederation of Trade Unions (KCTU), the country's No. 2 union, are conducting a signature campaign to set the minimum wage at 10,000 won per hour.

The corporate sector, however, countered, that a minimum wage hike would hurt the local job market.

"Taking into account bonuses and other work-related earnings, South Korea's actual minimum wage is not low at all," said the Korea Employers Federation. "The minimum wage should reflect conditions faced by small and medium-sized enterprises and independent businessmen who are already suffering right now."

The political parties joined the dispute with pledges to increase the minimum wage.

The ruling Saenuri Party and the main opposition Minjoo Party of Korea said they would increase the minimum wage to 8,000 won and 10,000 won by the end of the 20th National Assembly in 2020, respectively.

"Though it is hard to rebut the argument that we should expand the low-income group's consumption by increasing the minimum wage, an excessive hike that does not consider the management's ability or the labor market is not desirable," said Park Ji-soon, professor at Seoul's Korea University.

The deadline for setting up the minimum wage is June 28. The Ministry of Employment and Labor is scheduled to fix the decision by Aug. 5 after announcing the details of the agreement.

The council's next meeting is slated for June 2.

scaaet@yna.co.kr
(END)

HOME TOP
Send Feedback
How can we improve?
Thanks for your feedback!