Moon must fix itThe minimum wage was raised by double digits for two years in a row. The minimum wage committee on Friday raised the hourly wage for next year to 8,350 won (＄7.40), an 820 won increase from 7,530 won this year. That represents a whopping 29 percent jump over two years — a 16.3 percent surge in 2018 and another 10.9 percent rise next year.
The lead-up to the decision was tumultuous. Representatives of employers strongly complained of their financial difficulties and insisted on a freeze in the minimum wage and to have different minimum wages for different industries. In response, representatives of employees came up with a 43.3 percent increase to 10,790 won. After the employers’ group left the negotiating table to protest the government’s relentless push for wage hikes, the rest of the groups, including the employees’ group, reached a final decision.
But owners of small and mid-size businesses and mon-and-pop stores are threatening civil disobedience, claiming they simply cannot afford the wage hike. Representatives of labor unions also oppose the wage hike for the opposite reason, saying it’s too low. They claim it only means a 2.2 percent increase on year when taking into account inflation and other factors.
Such conflict basically originates with the way our minimum wage is calculated. Nevertheless, as opposition leader Kim Dong-cheol pointed out, the cost for the wage increase should be borne by employers even if it is determined by the government. The wage should be fixed based on affordability. Unfortunately, the push for the wage hike has been orchestrated by the government to realize President Moon Jae-in’s campaign promise to raise it to 10,000 won by 2020. Such a blind push only triggers resistance from employers across the country.
No one can find fault with trying to keep a campaign promise. But the Korean economy is struggling to achieve annual growth of 3 percent. Except for semiconductors, our main industries such as shipbuilding and steelmaking are in chronic depression. A countless number of small enterprises cannot afford the drastically upped wages. As a result, they had to lay off employees or raise prices.
Confusion about presidential commitments must be cleared by the president himself. If necessary, President Moon Jae-in must seek the understanding of voters. Without Moon addressing the confusion himself, the administration can hardly solve the problem.