Gov’t approves new 2020 minimum wage rateThe government confirmed that next year’s minimum wage will increase by 2.9 percent, upholding the Minimum Wage Council’s decision last month despite objections from labor unions.
The Ministry of Employment and Labor said Monday that from next year, the hourly minimum wage will stand at 8,590 won ($7.07), putting an end to the drawn-out dispute between labor and business over the standard.
Next year’s hourly minimum wage translates to 1.795 million won per month and will be applicable to all sectors.
The announcement follows the Minimum Wage Council’s vote last month to adopt the hourly minimum wage proposal by business representatives. The low increase rate led to strong protests from labor representatives. The 2.9 percent rise is the third lowest-ever hike to the minimum wage since it was first introduced in 1988.
Labor representatives had pushed for a rise to 8,880 won per hour during the final stages of negotiations. All nine labor representatives resigned from their posts at the council in protest, with the Federation of Korean Trade Unions calling the decision a “major catastrophe.”
The umbrella union also filed an objection, requesting a reevaluation. While the filing could have led to further talks, the Monday announcement from the government effectively concludes discussions on next year’s standard.
The labor ministry expressed regret at failing to meet the expectations of labor organizations.
“We will work toward social stability for workers through social insurance fee support … and also provide support to small- and medium-sized businesses that experience difficulties in management,” said Im Seo-jeong, vice minister of employment and labor, in a statement.
The Minimum Wage Council had negotiated for months over next year’s rate as business and labor representatives clashed on whether to raise the minimum wage at all.
Business representatives initially proposed a cut of 4 percent to 8,000 won from this year’s minimum wage, citing difficulties due to the steep hikes over the past two years.
Labor representatives at first demanded a rise to 10,000 won per hour for next year, in line with a campaign promise from President Moon Jae-in under his signature “income-led growth” policy.
Businesses have argued that the aggressive hikes to the minimum wage, under the current administration, have weighed on businesses already facing difficulties in a slowing economy.
According to a survey released last month by private think tank Hyundai Research Institute, 94 percent of businesses called for a slower rise to the minimum wage.
The minimum wage last year rose by 16.4 percent, the sharpest increase in nearly two decades, while this year it went up 10.9 percent.
Gross domestic product (GDP) growth last year was at 2.7 percent, the slowest in six years. The Bank of Korea has also lowered this year’s growth projections by 0.3 percentage points to 2.2 percent last month.
BY CHAE YUN-HWAN [firstname.lastname@example.org]
More in Economy
Number of part-time workers hits record high
Closing for good
Those who didn't buy are singing the real estate blues
Gov't to provide ￦30 trillion in trade financing for green, digital exports
Covid-19 pushes employment numbers down by 218,000 in 2020