Small business owners demand lower minimum wage for foreigners

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Small business owners demand lower minimum wage for foreigners

Representatives of employers, workers and the government attend the public hearing on next year's minimum wage in Gwangju, South Jeolla Province, Monday. Yonhap

By Jung Min-ho

Small business owners want the government to introduce a lower minimum wage for foreign workers in Korea.

At Monday's public hearing on next year's minimum wage in Gwangju, South Jeolla Province, representatives of employers said "steep" minimum wage hikes over the past two years have pushed many small businesses to the edge and that the government should help them by adopting a "different" wage system for foreign workers.

Song Young-soo, a small business owner in Gwangju, was among participants who
reportedly voiced the need for a lower minimum wage for foreign employees, who they say show lower labor productivity than Korean workers mainly because of communication problems.

According to a Korea Federation of Small and Medium Business survey early this year, the productivity of an average foreign worker (E-9 visa holder) was 87.5 percent of a Korean worker.

Over the past two years, the Moon Jae-in government has pushed its income-led growth strategy ― defined by rapid hikes in the minimum hourly wage and a shorter work week.

In 2018, Korea increased the minimum wage by 16.4 percent on-year to 7,530 won an hour, the steepest rise in 17 years. In 2019, the wage jumped by 10.9 percent to 8,350 won ($7.10).

A hike in the minimum wage was one of Moon's key election pledges. He originally promised to raise it to 10,000 won an hour by 2020 but signaled the need to adjust the pace of the hike.

The policy was introduced to improve the lives of low-income families here. But some critics, including former Bank of Korea Governor Park Seung, said it has had the opposite effect in many cases, lowering the quality of the lives of low-income families who run small businesses.

A labor ministry official said introducing a different minimum wage system for non-Koreans would be difficult, at least in the short run, because of the anti-discrimination law.


Representatives of employers, workers and the government attend the public hearing on next year's minimum wage in Gwangju, South Jeolla Province, Monday. Yonhap

By Jung Min-ho

Small business owners want the government to introduce a lower minimum wage for foreign workers in Korea.

At Monday's public hearing on next year's minimum wage in Gwangju, South Jeolla Province, representatives of employers said "steep" minimum wage hikes over the past two years have pushed many small businesses to the edge and that the government should help them by adopting a "different" wage system for foreign workers.

Song Young-soo, a small business owner in Gwangju, was among participants who
reportedly voiced the need for a lower minimum wage for foreign employees, who they say show lower labor productivity than Korean workers mainly because of communication problems.

According to a Korea Federation of Small and Medium Business survey early this year, the productivity of an average foreign worker (E-9 visa holder) was 87.5 percent of a Korean worker.

Over the past two years, the Moon Jae-in government has pushed its income-led growth strategy ― defined by rapid hikes in the minimum hourly wage and a shorter work week.

In 2018, Korea increased the minimum wage by 16.4 percent on-year to 7,530 won an hour, the steepest rise in 17 years. In 2019, the wage jumped by 10.9 percent to 8,350 won ($7.10).

A hike in the minimum wage was one of Moon's key election pledges. He originally promised to raise it to 10,000 won an hour by 2020 but signaled the need to adjust the pace of the hike.

The policy was introduced to improve the lives of low-income families here. But some critics, including former Bank of Korea Governor Park Seung, said it has had the opposite effect in many cases, lowering the quality of the lives of low-income families who run small businesses.

A labor ministry official said introducing a different minimum wage system for non-Koreans would be difficult, at least in the short run, because of the anti-discrimination law.


Jung Min-ho mj6c2@koreatimes.co.kr


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