Raise minimum wage

Raise minimum wage

People who work full time shouldn’t incur debt A trilateral panel of government, labor and management has set next year’s minimum wage at 4,860 won ($4.2) an hour. This is not enough to buy a bowl of cold noodles, or even a Big Mac set, including a coke and French fries. Yet business associations complain that the annual increase rate of 6.1 percent is too high, ignoring the economic situation. And representatives of labor circles boycotted final voting this year, too, to express their anger about the low wage floor and the one-sided selection of public-sector members of the Minimum Wage Council. It is long past time the nation rectified both the rock-bottom wage level and the ways it is fixed every year. The 2013 minimum wage is equivalent to a monthly salary of 1.01 million won based on a 40-hour workweek. Employers stress that the amount has finally broken the 1 million-won landmark. But it falls far short of the average living cost of 1.4 million won for a single-member household. In 2010, Korea’s consumer price-adjusted wage floor of $3.06 stood at only 30 percent of France’s ($10.86) and 38 percent of Japan’s ($8.16), according to the Korea Labor Institute. The nation’s minimum wage accounts for only 37 percent of its average wage, making it the only one with the rate below 40 percent among countries whose per capita gross national income exceeds $20,000. No less problematic is the way the minimum wage is decided yearly, in which both labor and management make proposals that show unrealistically wide gaps between each other’s expectations, and public-sector members of the trilateral council then mediate among them. In most cases, either employers or employees walk out of the vote depending on which side the mediated plan comes closer to. This outdated method has long outlived its usefulness, exacerbating only the already fragile industrial peace. Equally outdated is the management’s argument that minimum wage hikes are a job killer. True, an abrupt rise in the wage floor might wrinkle the bottom lines of businesses, particularly small- and medium-sized enterprises, forcing them to cut down on their payrolls somewhat. But most studies, here and abroad, show that minimum wage rises show far smaller effects than expected on corporate balance sheets. In the case of Korean SMEs, the biggest reason was demands from large businesses to slash supply prices. Taking various situations at home and abroad, calls from the labor to introduce a statutory minimum wage, for instance to 50 percent of the average wage plus the annual inflation rate, seem reasonable. The government should help by cushioning the impact of a rise in the minimum wage, providing basic life assistance for the newly unemployed as well as job training. The minimum wage should be what it literally means ― guaranteeing a basic living for workers. Those who work full time should be able to maintain minimal living standards without incurring debt. That is simply impossible in Korea now.