The South Korean government introduced a new minimum wage-setting system for the first
time in 31 years on Monday... in an effort to increase predictability and fairness so
that all related parties in the labor market can accommodate the changes... starting with
the wage increases for 2020.
For more on this, we have Kim Ji-yeon on the line.
Ji-yeon, tell us the details of the new system.
Sure.
As expected, Korea's labor ministry announced that the Minimum Wage Commission, a body that
determines the wage increases, is to be divided into two sub-bodies.
A committee of nine experts will set the range for the new minimum wage rates... among the
15 candidates recommended for the panel... five each are supported by labor, management
and government.
A separate committee made up of representatives of companies, non-regular workers and small
businesses will make the final decision.
Its members will be reduced to 15 or 21 members in total.
The Labor Minister Lee Jae-kap said the new system reflects the recommendations made by
the Committee's task force of 18 experts, which has been active for four months leading
up to December... and the committee has taken into account international standards set by
the International Labour Organization.
"The new system will be more reasonable in that the rates will be determined using experts'
opinions which are based on objective figures.
The decision-making process will be more rational than the previous process... which was a tug-of-war
between labor and management."
Up until now, there were a total of 27 members, nine of them were Public Interest Commissioners,
which were nominated by the Labor Minister and appointed by the president... and there
was criticism that these Public Interest Commissioners who usually had the casting vote in determining
the wage rate... followed the government's views on the minimum wage increases.
In the new system, the government won't have as much power to nominate or recommend the
Public Interest Commissioners.
The minister has also said it'll give groups of small businesses, young people and women
the right to recommend a member to be nominated for the Minimum Wage Committee to reflect
their views on the minimum wage.
For ten days starting January 21st... the government will gather public opinion on the
new system on-line... and experts will conduct debates on reforming the new minimum wage-setting
system.
The government hopes the measure can bridge the gap between employers and employees after
a whirlwind of controversy over the rapid rate of minimum wage increase during the past
years.
It may be too early to say, but how do you think the labor and management groups will
respond to the government's measures?
Before today's announcement by the labor ministry, one of the country's two umbrella labor unions
responded last week... criticizing the establishment of the two sub-bodies... saying the committee
of experts setting the wage rate ranges infringes on the autonomy of labor and management to
set the rate.
But all in all, we'll have to wait and see how they'll react to this proposal... the
two umbrella labor unions are scheduled to hold a workshop later this week on Wednesday
to come up with a united response.
Adjusting the pace of the minimum wage hikes has been cited in business circles... particularly
among small-and-medium-sized companies and the services sector... as the main reason
why employers have been reluctant to hire more people.
The country experienced employment shocks in July and August last year... as companies
reeled with the government's labor policy changes... including the 52-weekly cap on
working hours.
In line with its people-centered growth policies that entail raising incomes, the Moon administration
hiked this year's minimum wage by 10-point-9-percent from the previous year to seven-U.S.-dollars
and 50-cents... it follows a drastic 16-point-four-percent hike from 2017.
This is in comparison to the minimum wage increases which were between seven to eight
percent in the past before the Moon administration stepped into office.
Daniel?
Thanks Ji-yeon for that report.