Rep. Na Kyung-won, right, of the People Power Party and Rep. Choo Kyung-ho, its floor leader, attend a seminar at the National Assembly in Seoul, Wednesday. Newsis
Ruling party lawmakers and representatives for small business owners called for the introduction of a separate wage system for foreign workers, Wednesday, saying it is an issue of survival for many struggling businesses here.
At a seminar held at the National Assembly, Rep. Na Kyung-won of the People Power Party (PPP) said reforms in the universal minimum wage system would be essential to spur more people to hire foreign workers and to allow more citizens to enjoy the benefits from their labor.
“Increasing the number of foreign workers has become a necessity, not an option, amid (the country's) low birthrate and rapid aging trend,” Na said. “But because of the high minimum wage, financial difficulties have been increasing in many industrial sectors, including small business owners and farmers.”
More than a dozen lawmakers and representatives of the government gathered at the event, which reflects the high public interest in the issue. The arrival of 100 Filipino caregivers earlier this month was one of the reasons that sparked the interest, as many criticized the program, introduced to help ordinary parents raise their children more easily, for being too expensive — it costs more than 2 million won ($1,500) to hire a full-time worker as well as the social insurances required for a month.
Na echoed such criticism, saying that there have been calls for policymakers to learn from their counterparts in Hong Kong and Singapore, where residents enjoy the same services at much lower costs.
Rep. Choo Kyung-ho, floor leader of the party, and several other lawmakers also said residents in their constituencies demand legislation to address the issue.
Cha Nam-soo, a representative of the Korea Federation of Micro Enterprise, said the rapid rise in the minimum wage in recent years — from 5,210 won in 2014 to 9,860 won this year — has pushed many small business owners to the brink.
“Most employers who pay their workers the minimum wage are small business owners,” he said.
Citing survey results, Lee Myung-ro, a representative of the Korea Federation of SMEs, said most small business owners would be in support of adopting a new system to pay lower wages to foreign workers.
However, given that Korea's dependence on foreign workers is expected to continue to increase in the coming decades and that it is in competition with other countries to attract workers, he said setting up a new system would require a careful approach.
Korea's labor laws, which include minimum wage regulations, are designed mainly for employees working at companies. But the country's persistently low total fertility rate and labor shortages suggest that many foreign workers will be employed by individuals, said Kim Kyung-seon, a chair professor at Tech University of Korea.
She said demand for foreign workers is projected to grow fast in child-rearing and elderly care services in the near future, saying there should be policy changes to enable more people to use such services more affordably.
She also said reducing the costs would be especially important for Korean working mothers, many of whom are forced to choose between their professional careers and raising children at some point in their lives.
Introducing a different wage system for foreign workers is one way. Another option is to consider paying foreign workers partially with state-funded meals and housing services instead of cash, she said.
Kim Jun-hyung, a professor of economics at KAIST, agreed that the costs of such services are important for women's economic participation.
“From an economist's perspective, the benefits (of introducing a separate wage system) are obvious,” he said, adding that the challenge now is how to address it politically.