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A half-baked fix

Jan 18,2018
The Moon Jae-in administration is causing rancor in its push for the minimum wage. The Ministry of Employment and Labor on Monday threatened to disclose the identities of employers that repeatedly underpaid employees and impose loan restrictions on them. But it retracted slightly when it was met with strong protests from merchants. The government said it will only disclose names of those who are found guilty of exploiting employees.

An employer failing to pay employees for their labor must be punished according to the law. Under local laws, an employer violating the legal hourly wage payment could face three years in jail or a fine of up to 20 million won ($18,761). But laws must reflect reality. Workers who had been paid below the minimum wage totaled 2.66 million last year, 13.6 percent of total working population. The number is expected to reach 4 million this year due to a double-digit hike in the minimum wage. Some of them could have been intentionally exploitative. But there could be those who simply could not afford to pay workers the minimum wage.

The government must not clamp down on them without regard for individual circumstances. Those in dangerous lines of work such as delivery, security and cleaning are fretting about losing their jobs. Some estimate that millions of jobs could be axed as the result of a sharp increase in the minimum wage. The government also must not take lightly the rises in consumer prices.

President Moon Jae-in stands firm on his campaign to raise the minimum wage. Presiding over a cabinet meeting, he said the minimum wage is the pillar of ensuring minimum living standards for workers. The government has appropriated 3 trillion won in fiscal spending to subsidize workplaces employing 30 or fewer people 130,000 won per employee in their monthly pay check. But the program offers little comfort. To be eligible for the state handout, the workplaces must offer employees the three national insurance policies. But many employers and employees in small workplaces opt not to sign up for the coverage because they cannot afford it.

The government must look at the reality, not just the cause. It must moderate its campaign to achieve the 10,000 won minimum wage within the next three years. It must consider counting bonuses and other benefits as part of the minimum wage instead of just pushing up the top figure. The government must see the problems in its minimum wage policy and address them before it does serious damage.

JoongAng Ilbo, Jan. 17, Page 30