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(EDITORIAL from Korea Times on June 17)

All News 09:15 June 17, 2017

Row over minimum wage

Talks for the 2018 minimum wage began earlier this week with the participation of labor unions and business lobby groups.

The Minimum Wage Commission, convened by the labor ministry, held its first meeting Thursday since President Moon Jae-in took office to discuss raising the current 6,470 won (US$5.70) minimum wage per hour for next year.

The committee must come to a conclusion by June 29 so the labor ministry can announce next year's minimum wage on Aug. 5. But it is uncertain whether the deadline will be kept due to a severe clash in positions between workers and employers.

During the election campaign, Moon pledged gradually to raise the hourly minimum wage to 10,000 won by 2020. This can be achieved by increasing the minimum wage by an average of 15.7 percent a year for the next three years.

Raising the minimum wage is inevitable since it is considerably lower than that of other Organization for Economic Cooperation and Development (OECD) countries. The pledge is also understandable considering the need to close the widening income disparity and support low-income earners who struggle with the rise in living costs.

At the current wage level, an employee who works eight hours a day will make around 1.35 million won a month. This is hardly enough to cover basic costs for housing and education, causing many workers to live in poverty.

But the government should also note the mounting concerns of the business sector, which is already under pressure from the government to assist Moon's pledge to turn irregular workers into regular ones and cut working hours.

The business sector has strongly opposed the plan to raise the minimum wage, claiming soaring labor costs will strain management. In particular, small business owners who run convenience stores and restaurants, among others, are resisting the plan.

Many small businesses are already having a hard time adhering to the current wage level. A report showed one in eight workers makes less than the minimum wage.

It is necessary for the government to come up with measures to support smaller businesses through tax breaks and other incentives while pursuing the minimum wage hike.

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