Korea raises minimum wage to $6.64 an hour

SOUTH Korea’s MinimumWage Commission set next year’s minimum hourly wage at 7,530 won ($6.64), in the steepest on-year increase in 17 years, making the first big step towards realising President Moon Jae-in’s vision of 10,000 won by 2020.

In a 15-12 vote, the 27-member trilateral council of representatives from labour, management and the general public, decided to increase the lower limit of wages 16.4 percent for 2018. It was the biggest gain since 2000.

This year’s minimum wage was set at 6,470 won per hour, up 7 per cent from a year ago.

At least 4.63 million workers, or 23 percent of all workers, will be affected by the increase, based on data from Statistics Korea.

Those who work eight hours a day on the minimum wage will receive 60,240 won a day and 1.57 million won a month.

“The suggestions made by both sides [labour and management] reflected the government’s will to push for a mini- mum wage for 10,000 won (by 2020),” said Uh Soo-bong, professor at Korea University of Technology and Education, who chairs the commission.

The liberal Moon Jae-in administration is pushing for “incomeled growth”, stressing that an increase in household income will create a virtuous economic cycle of stronger domestic consumption, higher corporate profits and more jobs.

To realise this, Moon has vowed efforts for a higher minimum wage and a reduction in average working hours.

Employers, particularly smalland medium-size business owners, have been calling for caution, fearing increased labour costs could threaten the fundamental of their business.

Mindful of this, the government moved swiftly to come up with measures to support them.

“The decision will benefit many workers, but it could also put a heavy burden on small business owners,” said Finance Minister Kim Dong-yeon during a meeting with economy-related ministers.