Asia Minute: South Korea’s Minimum Wage Politics

Jul 17, 2018

Credit Karl Baron / Flickr

Hawaii is one of 18 states that raised its minimum wage this year to $10.10 an hour. That’s an increase of about nine-percent from last year. In South Korea, the minimum wage rose nearly twice as much this year and is headed higher — but the politics have become complicated.

South Korea’s minimum wage will go up by nearly 11 percent next year. Following a jump of more than 16-percent this year.

On Monday, South Korea’s president apologized — saying it’s moving too slowly. One of Moon Jae-in’s campaign promises was to raise the minimum wage to 10,000 won by the year 2020. That’s a little less than nine dollars an hour — about twenty-percent higher than next year’s minimum wage.

President Moon now says that target will be “difficult.”

The policy decision for next year’s figure was announced Saturday by the “Minimum Wage Commission” — made up of representatives from government, labor and industry. Opposition politicians and Moon’s own finance minister say wages are rising too fast.

Several business organizations agree — arguing that higher wages have already led to job cuts in certain parts of the economy. Government figures show employment in sectors including restaurants, the hospitality industry and retail have fallen this year.

Moon says higher wages are needed to guarantee “quality lives for low-income earners.”

Seoul at night
Credit Philippe Teuwen / Flickr

Advocates on both sides of the issue were disappointed with the decision of the Minimum Wage Commission.

The Korea Federation of Micro Enterprise suggested boycotting the new wage hike, saying it is too much, while the Federation of Korea Trade Unions says it does not go far enough.