1. Labor demands 21.6% increase in the minimum wage for 2014
Conflict is deepening between labor and management surrounding the minimum wage for 2014. Labor is demanding a high increase in the minimum wage while business is determined to freeze the existing minimum wage. At the 2nd Minimum Wage Council Meeting held on June 7, labor council members demanded that the minimum wage be increased by 21.6% (to $5.16 USD) for 2014. (Currently, the minimum wage is $4.24 USD per hour). However business members, led by the Korea Employers Federation (KEF), insisted on a freezing of the minimum wage, considering that the minimum wage has increased two times faster than both the wages of ordinary workers and consumer prices over the last 13 years. As a way of expressing their opposition to the business members, all of the labor members walked out of the conference room and refused to negotiate further.
From 2000 to 2012, the wages of ordinary workers increased an average of 4.0% each year while consumer prices rose by 3.0%. By contrast, minimum wages increased an average of 8.1% each year. In short, the minimum wage has increased two times faster than the wages of ordinary wage earners and 2.7 times faster than consumer prices. This rapid increase in minimum wage over the past few years makes it difficult to increase the minimum wage even further.
The Minimum Wage Council is composed of 27 members, with 9 each representing labor, business and the public interest. If the Council finalizes the minimum wage for the upcoming year by the end of June, the Minister of Employment and Labor will officially announce the minimum wage by the end of August.
2. Conflict deepening over ‘Tripartite Jobs Pact’
On May 30, the Ministry of Employment & Labor (MOEL), the KEF and the Federation of Korean Trade Unions (FKTU) signed a ‘Tripartite Jobs Pact’, with a goal to achieve an employment rate of 70%. However, this triggered internal conflict within the FKTU. In particular, at the meeting of executive officers held on June 4, representatives of industrial unions, including the Korean Financial Industry Union (KFIU), strongly criticized FKTU president Moon Jin-kook for signing the pact without consulting the affiliated industrial union leaders. They also demanded that the Tripartite Jobs Pact be formally abrogated. Confronted with this strong criticism, Mr. Moon closed the meeting without concluding the items under discussion.
Meanwhile, the Korean Confederation of Trade Unions (KCTU) which did not take part in signing the Tripartite Jobs Pact also demanded abrogation of the Pact, and denounced it as a ‘secret pact for creating poor-quality jobs’.
3. Industry-level bargaining in the metal industry ruptured, Strikes expected in July
The metal industry held its 9th industry-level bargaining session on June 18th. However, labor and management failed to reach an agreement on the main issues such as the prohibition of unfair trade practices between primary and subcontract firms and the conversion of non-regular workers to the status of regular workers. After announcing that negotiations had broken off, the trade union decided to stage a series of strikes during the second week of July. Union members are planning to vote whether to go on a strike in July 25~27, after applying for mediation of the labor dispute at the National Labor Relations Commission on July 20.
The Korean Metal Industry Employers Association proposed a revised draft which contains determining the wage system through discussion at workplace-level negotiations and no implementation of flextime working system unilaterally. While respecting the Act on Age Discrimination Prohibition in Employment and Aged Employment Promotion, the Association suggested that early implementation of the retirement age extension would be possible through reformation of the wage system.
The trade unions rejected the employers’ proposal, claiming that there had been no progress in minimum wage negotiations within the metal industry, nor on conversion of non-regular workers to regular workers status, or expansion of the scope of company-level collective bargaining. Further negotiations between labor and management are expected to take place after settlement of the mediation applied for by the trade union.