Shipbuilders to receive support as wages rise

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Shipbuilders to receive support as wages rise

Korea’s Industry Ministry Thursday asked for local shipbuilders’ cooperation over the latest rise in the minimum wage, promising to provide support in 2019.

The Ministry of Trade, Industry and Energy said it is making efforts to ease the burden on local shipbuilders and marine engineering firms through financial support so that the new minimum wage can be absorbed by the market.

Korea’s hourly minimum wage for 2019 is set at 8,350 won ($7.29), up 10.9 percent from last year’s 7,530 won. The new amount represents a 29.1 percent rise since President Moon Jae-in took office two years ago.

The ministry said it is willing to continue talks with local firms to minimize their burden down the road and urged the companies to cooperate in implementing the wage rise to improve the quality of jobs in the country.

Shipbuilders and marine engineering firms have expressed concerns over the steep wage increase, citing the issue as one of the key challenges they face this year along with the U.S.-China trade dispute.

The government added it will faithfully implement financial programs totaling 1.7 trillion won to support local shipbuilders in 2019.

Meanwhile, shipbuilders said the industry is expecting a full-fledged recovery this year, considering it showed significant improvement in 2018.

Last year, for the first time in seven years, Korean shipyards ranked No. 1 in terms of annual orders, according to data compiled by global research firm Clarkson Research Institute.

However, the rising costs of materials, along with the gloomy outlook over the global economy, remain potential threats, they added.

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