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Now is the time to decide

July 28,2018
President Moon Jae-in had a conversation with citizens after work at a pub in Gwanghwamun, central Seoul on Thursday. He listened to various opinions on a variety of topics, including the government’s drastic minimum wage increase. During the one-and-half-hour meeting, over 30 guests, including young job seekers, an apartment security guard, the CEO of a small company and the owner of a convenience store, took part. Through the event, Moon kept his campaign promise to drink with citizens in downtown Seoul after work.

The event is aimed at finding some clues to resolving the deepening financial hardships for mom-and-pop shops and small- and mid-sized businesses and fixing the worsening unemployment. Moon listened to their complaints, saying, “I came here to attend to your reactions to government policies.”

The guests complained about their financial trouble in running their businesses after the minimum wage hike and the implementation of the 52-hour workweek. A restaurant owner asked Moon to exclude workplaces with fewer than five employees from the higher minimum wage. The owner of another small business grumbled about a drastic reduction in revenue after shorter work hours.

The Korea Employers Federation, the Korea Federation of SMEs and the Korea Federation of Micro Enterprises have each submitted their own complaints to the Ministry of Employment and Labor. The three groups called on Moon to reconsider the 10.9 percent increase in the minimum wage for next year as it applies to all areas of industries without considering their differences and because they cannot afford the wage hike.

Korea’s minimum wage is expected to be higher than in Japan. On June 25, Tokyo decided to ratchet up Japan’s hourly minimum wage to about 8,851 won for one year starting in October. That’s a 3.1 percent increase from the previous year. Compared to Korea’s minimum wage of 8,350 won for 2019, the figure is a bit higher. But Japan’s minimum wage varies by regions. Taking the difference into account, 32 out of 47 local governments in Japan have lower minimum wages than Korea.

Small and mid-size businesses in Ulsan, Daegu and Incheon have threatened to boycott the minimum wage hike. The Federation of Micro Enterprises vehemently opposes it by distributing autonomous work contract standards to its members.

No matter how well-intended, policies make the people’s lives worse if they have serious side-effects. It is time for Moon to decide. The government must reconsider next year’s minimum wage. Even if it’s a campaign promise, Moon must fix it because our economy cannot afford it.

JoongAng Ilbo, July 27, Page 30