Asia Minute: South Korea’s Rising Minimum Wage

Jul 19, 2017

Credit YunHo LEE / Flickr

Hawai‘i’s minimum wage will rise to 10-dollars and ten cents an hour next year from its current level of $9.25. A proposal to increase it even more was defeated in the legislature earlier this year. This week, the government in South Korea boosted the national minimum wage—by double digits. HPR’s Bill Dorman has more in today’s Asia Minute.

South Korea’s minimum wage is going up by 16 percent next year. Its sharpest increase in nearly 20 years.

President Moon Jae-in promised to push incomes higher before he took office about two months ago.

The minimum wage debate brought out the usual arguments.

Labor advocates wanted a bigger raise—pointing to continued income disparity in Korea.

Business organizations like the Korea Federation of Small and Medium-sized Enterprises warned that a higher minimum wage would cut into profitability and could result in fewer jobs.

As part of the policy, Korea’s government will provide funding to certain small businesses to offset some of the costs.

The Korea Herald was cautious in an editorial this week, saying “it is questionable whether government can continue to subsidize rising labor costs.”

President Moon wants to raise the minimum wage by about another third by the year 2020.

That would take it to 10,000 won an hour – or just under nine dollars.

Bloomberg reports the minimum wage still trails South Korea’s peers in the Organization for Economic Cooperation and Development

It’s also a long way from 1988, when the country’s minimum wage was the equivalent of about fifty cents an hour.