Ministry pins hopes on minimum wage hike
Korea’s increase of the minimum wage will boost private spending, which in turn can help Asia’s fourth-largest economy break from its low growth trend, a senior government official said Friday.Last July, the country decided to raise its minimum wage by 16 percent to 7,530 won ($7.08) for 2018, the biggest jump in about two decades.
Although a higher minimum wage is one of the government’s strategies to boost private consumption and narrow the income gap, small and medium-sized businesses expressed concerns about higher labor costs.
The government has earmarked 3 trillion won to reduce the burden on smaller firms that hire part-time workers.
“There are also concerns about rising inflation stemming from the minimum wage hike, but inflation is expected to remain at a manageable level,” Koh Hyeong-gwon, deputy finance minister, said in a meeting with senior officials from other ministries.
The minimum wage hike is the starting point for easing income polarization, and it could create a virtuous cycle of corporate investment and growth as well, he said.
The government is determined to further raise the minimum wage to at least 10,000 won by 2020.
Yonhap
with the Korea JoongAng Daily
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