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Labor, business sides should accept agreement for sake of sharing pain
The nation's minimum hourly wage has been set at 9,620 won ($7.41) for next year, an increase of 5 percent from this year. Representatives of the labor and management reached the agreement Wednesday night during a meeting of the Minimum Wage Commission (MWC). Despite the agreement, however, a dispute is expected to linger as both the labor and business sides remain dissatisfied.
The labor side proposed the minimum wage to be set at 10,080 won, up 10 percent year-on-year, conceding on its original demand for a 12.9-percent hike or 10,890 won. The management side, for its part, called for a 1.86-percent annual increase or 9,330 won, through it previously asked for freezing the wage at 9,160 won. As the two sides failed to narrow their differing stances, the MWC members on behalf of the general public submitted a proposal of 9,620 won and put it for a vote.
The proposal was confirmed by a 12-1 vote with 10 abstentions. It was passed before the legal deadline for deliberation for the first time in eight years since 2014. The minimum hourly wage substantially increased during the five-year term of former President Moon Jae-in, rising 16.4 percent in 2018. Amid fierce opposition from companies and small business owners, the minimum wage rose only 1.5 percent in 2021.
Deputy Prime Minister and Minister of Strategy and Finance Choo Kyung-ho has called on the labor representatives to refrain from demanding excessive wage hike. He said this year's consumer price growth will likely amount to 6 percent level, reaching the highest inflationary rate since the nation was hit by financial crisis in 1997.
The Korean Confederation of Trade Unions said the "low growth rate (of the minimum wage) will drive the low-income workers to the brink of cliff amid looming signs of widening economic inequality and bipolarization." The organization said the recent hike in minimum wage has failed to properly reflect the consumer prices growth. As a result, the workers are set to suffer from a virtual cut in their wages, it said.
The Korea Enterprises Federation, mouthpiece of the management side, expressed dissatisfaction with the agreement in light of the financial difficulties facing the small-and-medium businesses and self-employed proprietors. Regarding the hardship faced with the businesses, it also cited the spiraling prices of resources and materials coupled with the steady depreciation of Korean currency and consequent hikes in prices of imported goods.
We urge both the labor and management sides to accept the agreement for the sake of sharing of pains though they may not be fully satisfied with it. This is all the more necessary given the prospectus "economic storms." The government and the businesses should come up with follow-up measures to lead the nation to get over the hardship properly. Major conglomerates, in particular, should focus on creating more decent jobs by utilizing the money which became available due to the government's recent lowering of their maximum corporate tax from 25 percent to 22 percent.
