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A half-baked revision

May 28,2018
The National Assembly’s Environment and Labor Committee approved a bill to revise the minimum wage law. The bill proposes to include bonuses above 25 percent of the minimum wage and welfare benefits above 7 percent of the minimum wage in the minimum wage from next year.

For instance, a worker who is paid this year’s hourly minimum wage of 7,530 won ($7) — or 1.57 million won per month for 40 hours of work per week — won’t be affected if he or she receives bonuses below 400,000 won per month or welfare benefits below 110,000 won. But any bonuses or welfare benefits exceeding the 25 percent and 7 percent rates would be counted in as the minimum wage.

The new provision will help prevent an unwanted fall in income for workers earning less than 25 million won a year due to the extended scope of the wage base. It also would help prevent workers paid above the minimum wage through fat regular bonus checks from enjoying the annual hikes in the minimum wage.

However, the changes still fall short of expectations as the bill restricted the scope of pay to a month. Since bonuses are paid every two to three months, they may not be counted in as the minimum wage in most workplaces. Of course, there is a provision allowing employers to change hiring regulations to pay bonuses monthly, but that cannot work in large workplaces with unions, where collective bargaining terms come above corporate mandates.

Therefore, if unions at large companies refuse the change in their bonus payment system, the income gap between large and smaller workplaces would only worsen.

The bill also fails to address the problem of imposing universal minimum wage increases on all industries and regions. Many experts have advised the increases should reflect the differences in cost of living, work level, and employers’ financial affordability by industry and region.

Two umbrella union groups vowed to depart from the tripartite dialogue body and launch strikes against the changes to the minimum wage. As the head of the ruling party said, the two umbrella union groups represent just 2 million members of large and public company unions, not the entire labor force of 19 million. It raises questions if any developments can be made on the labor front with such selfish union groups.

JoongAng Sunday, May 26-27, Page 34