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Mending the wage system

Aug 10,2018
Mom-and-pop shopkeepers took to the streets. A group set up to protect their right to survival opened a petition center in central Seoul Thursday to share the problems they face because of the government’s hiking of the minimum wage. It gathered signatures on a petition to improve the way the government determines the minimum wage. A makeshift tent in Gwanghwamun was plastered with slogans such as “A 29 percent increase in the wage over two years!” and “Fix the wrong system!”

The demonstration was a vivid illustration of the disastrous effects on many businesses from the drastic increase in the minimum wage. Last Friday, the government confirmed that next year’s minimum wage will increase by 10.9 percent to 8,350 won ($7.41). Until recently, the government was committed to achieving a 10,000 won hourly wage by 2020, a campaign promise by President Moon Jae-in. In a press release, the shopkeepers group highlighted the adverse ramifications of the hikes. “The minimum wage bomb is killing us all. We are not being treated equally by the government!” complained a member of the group.

Under such circumstances, the Ministry of Employment and Labor is taking a firm stance. It dismissed the Korea Federation of SMEs’ demand to reconsider the steep wage increase as the government bypassed a law that required it to take labor productivity and other factors into account. We are dumbfounded at the ministry’s refusal. It’s simply burying its head in the sand. If the ministry only cares about labor — not employment — its name should be changed to the ministry of labor.

The rapid increase in the minimum wage helped Moon’s approval rating to decline. It fell to 58 percent in a recent survey from over 80 percent two months ago. The dramatic fall in his approval rating was caused by the wage hikes.

Fortunately, there are some signs of change. A presidential secretary appointed to deal with mom-and-pop shopkeepers hinted at the possibility of applying the minimum wage differently according to the type of business. The chairman of the Environment and Labor Committee in the legislature also plans to revise the law so that the minimum wage can be fixed every two years. The revision aims to let the National Assembly — not the president — appoint a third of the members of the Minimum Wage Committee. The government must fix the problematic minimum wage determination system which triggered a public disobedience movement by helpless small merchants.

JoongAng Ilbo, Aug. 10, Page 30