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Let’s press the ‘pause’ button

June 22,2018
이미지뷰
The Federation of Korea Trade Unions holds a meeting Thursday to discuss problems with the government-pushed minimum wage hikes. [YONHAP]
PARK HYUN-YOUNG
*The author is a deputy editor of the JoongAng Sunday.

“Now Hiring.” I saw many stores with that sign on windows when I visited San Francisco in February. Restaurants, supermarkets and souvenir shops were hiring. Those signs were seen for several days, so I assumed that it was easy for people to find work. In fact, San Francisco’s unemployment rate in March was 2.4 percent, a level of full employment.

San Francisco is considered a city that values the most progressive values. It is leading in workers’ rights. The state of California has one of the highest minimum wages in the United States. The minimum hourly wage is $11 per hour, second highest among the 50 states after Washington D.C.’s $11.50. It is 51 percent higher than the federal minimum wage of $7.25. California has finalized a plan to raise the minimum wage by $1 annually to $15 by 2022.

However, it seems that workers do not need to rely on the minimum wage. Due to the competition for labor, employers began to voluntarily offer higher wages. Costco plans to raise the hourly wage for new hires to $14. Prices are rising, and the homeless population is growing. But I could tell that the economy was vitalized with more jobs and higher wages.

The minimum wage increase for the next five years was set thanks to the thriving economy, but California was not arrogant. It was agreed that the plan to raise the minimum wage could be temporarily suspended if the economic conditions worsened or if the state government budget is tight. The so-called pause button was introduced. The standards of weakening economy are also stipulated to avoid further disputes. The governor can press the pause button if the job growth rate decreases for three or six months and retail sales decline for 12 months. It can also be paused if a fiscal deficit is expected for that year or within the next two years. Whether to pause the minimum wage increase for the following year needs to be decided before September 1.

California is wary about minimum wage increases, because raising it too much or too quickly is not necessarily the best for the workers. How about Korea? Even the president is involved in the debate over the policy impact. Statistics — such as an “income decline for the bottom 20 percent” or an “income increase of low-income earners” — are used to justify claims.

As Mark Twain said, “facts are stubborn things, but statistics are pliable,” and policies should be determined based on facts on economic situations rather than claims based on individual statistics.

That’s why California’s “pause” button is significant. Pause is different from “cancel” as it can resume anytime the “play” button is pressed. It allows for predictable and flexible responses.

JoongAng Ilbo, June 21, Page 30