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2020 minimum wage will be the same for all

June 28,2019
The committee deciding next year’s minimum wage upset small- and medium-sized companies on Thursday by deciding to once again set a single wage that applies to all types of businesses.

The move by the Minimum Wage Council defied growing calls from employers - especially smaller merchants - to freeze the rate for some categories of businesses following a near 30-percent rise in the past two years.

The Korea Federation of SMEs, an association representing 3.6 million small- and medium-sized enterprises (SMEs) in the country, criticized the decision in a press briefing.

The association said its members called on policymakers to try their best to freeze next year’s mandated minimum wage during a meeting held at the Lotte Hotel in Jeju.

“At the meeting, the owners said that the economic downturn and the steep rise of the minimum wage in the past two years have made their lives hard to bear,” said the federation in a statement.

Kim Ki-mun, chairman of the association, underscored the particular difficulties felt by small business owners.

“The minimum wage should be applied in a disproportionate manner depending on employers’ ability to pay wage,” Kim said. “In the past two years, we’ve tried to comply with the rules, but it seems now is the time to address that.”

The federation members also mentioned the challenges its members face implementing a 52-hour work week for companies with less than 300 workers, which will be required starting next year.

The reduced working hours will add to the costs of business for smaller companies, the group said.

The council, a trilateral body consisting of representatives of companies, labor and outside experts, decided late Wednesday to impose the same minimum pay scale next year regardless of the size of a company or its business segment.

Business representatives argued that they had already tolerated a nearly 30-percent hike in the minimum wage over the past two years and that additional increases will hurt even more.

Labor representatives, on the other hand, argued that a 10,000 won ($8.50) per hour minimum wage is a campaign promise that needs to be kept by President Moon Jae-in and dismissed accusations that the higher minimum wage has weakened the economy.

The 27 members included nine from business, nine from labor and nine representing the public. Business representatives expressed disapproval of the council’s decision.

Those nine members failed to attend a session of the council on Thursday in protest.

The council missed the legal deadline for its decision, which was Thursday.

BY PARK EUN-JEE [park.eunjee@joongang.co.kr]