Gov’t again calls for Kaesong wage talks

The Korean government reiterated its position that it will not accept the North’s unilateral notification for a wage increase for its workers at the Kaesong Industrial Complex and urged North Korean authorities to come to the table to settle the issue.

During a press conference at the central government complex, Unification Ministry spokesman Lim Byeong-cheol said that it will not allow the North’s demand for a 5.18 percent increase in the minimum wages of workers at the Kaesong Industrial Complex, located just north of the highly militarized border separating the two Koreas, and added that the matter must be solved through bilateral talks.

“This is in violation of an inter-Korean agreement that both sides reached when we reopened the industrial complex in 2013, which requires that we solve this matter in a bilateral manner,” Lim said.

He added that the Unification Ministry sent a proposal to the North calling for the two to hold talks on the issue on March 13. However, North Korea has refused.

“We are here to make yet another official offer to the North that we hold a meeting presided over by the joint inter-Korean committee on March 13,” Lim said.

The proposal comes a day after Pyongyang unilaterally notified Seoul of its decision to raise the minimum wage of the some 53,000 North Korean workers employed by about 120 South Korean companies.

The increase is nearly $4 - or 5.18 percent - from $70.35 to $74, and will go into effect starting from March 1.

Pyongyang argues that Kaesong companies should pay their workers 15 percent of their base salary, plus any overtime wages and other living expenses, as a part of social insurance fees. South Korean companies currently only pay 15 percent of base salary.

This would increase the average monthly wage for North Korean workers in the Kaesong zone, raising it from $155 to $164.10.

Lim accused the North of acting against the commons interests of the Kaesong complex.

Until now, the minimum wage for workers in Kaesong was set out in an agreement by South Korea’s Kaesong Industrial Complex Management Committee and the North Korean side.

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

Lim said the government has no intention to accept the North’s decision without negotiations.

The Kaesong industrial complex is the only joint business operation between the two Koreas since the South imposed sanctions in retaliation to the North’s attack in 2010 on the Cheonan warship, which left 46 sailors dead.

BY KANG JIN-KYU [jkkang2@joongang.co.kr]