Minimum wage hikes outpace OECD: KEFOne of the leading business lobbying groups has once again raised the need to slow down next year’s minimum wage increase on the grounds that it has already risen at the sharpest rate among Organization for Economic Cooperation and Development (OECD) member countries.
The Korea Employers Federation (KEF) on Sunday released a study that pointed out that Korea’s minimum wage has gone up 29.1 percent in the last two years to 8,350 won ($7.11) per hour compared to 2017.
The government raised the minimum wage 16.4 percent for 2018 and 10.9 percent for this year.
The minimum wage increase in the last two years is faster than the average 14.2 percent of the 28 OECD member countries.
It’s also dramatically faster than other advanced economies including Japan, which increased by 3.1 percent; Germany by 3.9 percent, Britain by 9.5 percent and France by 2.8 percent.
Korea’s minimum wage in the last five years has gone up 60.3 percent. That’s also faster than the 32.6-percent average increase of OECD member countries. In the same period, Japan has increased 11.4 percent; Germany by 8.1 percent; Britain by 21.1 percent and France by 5.2 percent.
Over the last five years, the only countries that have seen a faster increase are Lithuania and Turkey, both jumping up more than 40 percent.
The business lobbying group said Korea’s minimum wage was equivalent to 64.5 percent of the hourly wage of those in the middle income bracket and 50 percent of the average hourly wage of all paid workers.
That’s higher than the 54.7 percent of middle income hourly wages and 43.4 percent of hourly pay averaged at the 28 OECD member countries.
The KEF said that considering the need to improve Korea’s international competitiveness, the minimum wage should not exceed 60 percent of middle income hourly wages.
The report came as negotiations between the tripartite parties - businesses, unions and the government - on next year’s minimum wage are set to begin later this month.
There is already speculation that the minimum wage could either be frozen or see a single-digit increase as President Moon Jae-in said during an interview last week that he is not obsessed with keeping his campaign promise to raise the minimum wage to 10,000 won per hour by 2020, opening the widow for a less aggressive hike.
BY LEE HO-JEONG [email@example.com]