Burden on companies seem to increase with labor’s demands for excessive minimum wage hike
Labor is working on a large increase of minimum wage in 2016. The KCTU (Korean Confederation of Trade Unions) held a press conference on 12 March, and insisted on a minimum wage of KRW 10,000 (US$9) per hour.
The KCTU has 4 of the 27 councilor seats (9 public interest councilors, 9 employer councilors, 9 worker councilors) in Minimum Wage Council. The KCTU is planning to designate 4 new councilors (3 from the KCTU, 1 from an external youth organization) who support and will demand this increase, as the current 4 councilors’ term will expire in April 2015. The KCTU is also planning to draw public attention to minimum wage by declaring KRW 10,000 as their goal in the April general strike, running a campaign to collect 5 million signatures in support, and holding debates etc.
With the KCTU demanding KRW 10,000 for the 2016 minimum wage, the FKTU (Federation of Korean Trade Unions) made a statement on 17 March that “Employers should participate in increasing the minimum wage.”
The burden on companies is expected to increase since the government is also taking a supportive stance on increasing minimum wage, with the deputy prime minister for economic affairs and Minister of Security & Finance (Choi Gyeong-hwan), and the Minister of Employment & Labor (Lee Ki-kweon) mentioning that minimum wage should be increased by 7% or more. Companies may find themselves less competitive, with SMEs and micro-businesses struggling to survive.
Politicians are also working on minimum wage increases, with the Justice Party insisting minimum wage should be KRW 10,000 before President Park Geun-hye’s term ends. The party is also demanding that minimum wage for private sector workers be set at 50% of the average wage of workers. The New Politics Alliance for Democracy (NPAD) is expected to continue activities for law revision* related to minimum wage increases, alleviating household debt and reducing living cost in the provisional session of the National Assembly in April.
* The NPAD proposed revised bills on the Minimum Wage Act to increase minimum wage to at least 50% of the average wage of all employees and to legislate a ‘living wage.’