North fiddles with Kaesong wages

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North fiddles with Kaesong wages

South Korea complained Monday about the North altering the wage system at the inter-Korean Kaesong Industrial Complex.

“The two Koreas had agreed to improve the wage system of the Kaesong Industrial Complex to meet international standards, but any revision should be made through inter-Korean consultations,” said Lim Byeong-cheol, spokesman for the South’s Unification Ministry. “The North’s recent announcement is a unilateral move in violation of inter-Korean agreements and we regret the situation.”

The North’s Committee for the Peaceful Reunification of the Fatherland said Saturday that the Standing Committee of the Supreme People’s Assembly revised some of the regulations governing the Kaesong Industrial Complex on Nov. 20. The announcement was made through the committee’s propaganda mouthpiece, Uriminzokkiri.

According to the committee, the North’s legislature changed 10 clauses governing the wage system of complex. Before the changes, the minimum wage of a worker started at $50 and yearly wage increases were limited to five percent of the previous year’s minimum wage. The North removed the terms and added a new clause saying the Central Industrial District Guidance Office will decide the minimum wage and its increases by evaluating labor productivity, the economic development of the industrial complex and the employment situation.

Until now, the minimum wage of the workers in Kaesong has been decided through an agreement by the South’s Kaesong Industrial Complex Management Committee and the North Korean Bureau.

Since 2007, the amount has been increased by 5 percent every year, and is currently set at $70.35. Including overtime payments and incentives, a worker can receive monthly pay as high as $150. The North Korean government takes about 40 percent.

Unification Ministry spokesman Lim said the North had not officially informed the South about the changes as of Monday morning. He said Seoul will register a protest after meeting with the North’s authorities in Kaesong.

“We want to check first on the North’s intention and how much they plan to increase the minimum wage,” Lim said. “And we will consult with South Korean operators of factories in Kaesong as to how the changes will affect their businesses.”

Pyongyang had made other attempts to increase wages in Kaesong this year. In June, the two Koreas agreed to increase the minimum wage by 5 percent starting from May, adding an additional $4 million in costs to the South Korean companies.

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