2 sides miles apart on 2020 wages

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2 sides miles apart on 2020 wages


Ryu Ki-jung, second from right, Korea Employers Federation director, representing business, makes a comment during the Minimum Wage Commission meeting held on Wednesday. [YONHAP]

With the deadline only a month away, talks on next year’s minimum wage are just starting.

And the two sides - business and labor - are showing no signs of compromise, especially at a time when the economy is facing headwinds and global uncertainties are on the rise as conflict remains between the United States and China, and discord between Korea and Japan intensifies.

Late Wednesday, business representatives on the 27-member Minimum Wage Commission made their first proposal, requesting the minimum wage be cut 4.2 percent to 8,000 won ($6.84) per hour.

This is the first time since 2009 - when the economy was affected by the global economic crisis - that the business community has requested a cut in the minimum wage. That year, the business representatives asked that the rate be cut 5.8 percent.

When including the pay made when working on weekends and holidays, the minimum wage proposed comes to 9,609 won per hour. When translating to a monthly total, the 8,000 won pay comes to 1.67 million won. In terms of annual wages, it comes to 20.06 million won.

In a statement, the business representatives argued that they have taken into account the unfavorable economic conditions and trouble small companies and self-employed businesses are having to pay their employees.

The business representatives said it is necessary to cut the minimum wage for next year to send out a positive signal to the market when the economy in general and the job market in specific are in such bad shape.

The proposal came a day after the unions requested that the minimum wage for 2020 be raised nearly 20 percent from this year’s 8,350 won per hour to 10,000 won, citing President Moon Jae-in’s campaign promise.

This is more than the increase in the past two years. The minimum wage for last year increased 16.4 percent, while for this year it was raised 10.9 percent.

When adding pay made for working on weekends and holidays, the proposed hourly minimum wage would come to 12,012 won. The monthly wage would be 2.09 million won and annual wage 25.08 million won.

With both sides turning in their first proposals, the council plans to narrow down the differences by July 10. A recommendation will then be sent to the employment and labor minister for final approval.

Immediately after the business representatives proposed the cut in the minimum wage next year, the labor side on the commission argued that the proposal goes against the very concept of the minimum wage, which protects low-income workers, as well as the constitutional values.

Small businesses on Tuesday responded negatively to the labor proposal of increasing the minimum wage nearly 20 percent.

The Korea Federation of SMEs on Tuesday released a statement expressing its disappointment on the labor side’s position to sharply increase the minimum wage, adding that the labor representatives will be taking the country a step back considering the current harsh reality.

The Korea Federation of SMEs argued that the Korean economy will collapse if the minimum wage is further raised from the near 30 percent increase over the past two years. It argued that companies will have no other choice but to let workers go.

Similar sentiments were expressed by the Korea Federation of Micro Enterprise. Both business organizations have requested that the minimum wage be at very least frozen.

BY LEE HO-JEONG [lee.hojeong@joongang.co.kr]
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