The Korean Confederation of Trade Unions (KCTU) is sending out emails to the public interest delegates of the Minimum Wage Commission (MWC), calling for their resignation. The KCTU created a separate website for the “mass mailing” campaign. The term of office for public interest delegates ends on Thursday but most of them are likely to remain in office. The KCTU argues that it is these public interest delegates who objected to an increase in the minimum wage for the past two years. It appears the KCTU aims to increase the country’s minimum wage by putting public interest delegates under pressure ahead of the minimum wage talks set for July.
Pressuring public interest delegates through mass emails is inappropriate in both the manner and purpose. The KCTU is also a representative member of the MWC, representing the labor sector. It is against the spirit of consultation for the KCTU to pressure other representatives of the commission. Considering the harsh reality faced by small and medium-sized businesses and the self-employed, who are hit hard by the Covid-19 pandemic, it is questionable if a significant increase in minimum wage is appropriate.
The current Moon Jae-in administration experienced the worst employment crisis after it raised the minimum wage significantly in 2018 and 2019. Although the rate of increase was lowered over the next two years, the burden of labor cost is still discouraging businesses to hire new workers. According to the Federation of Korean Industries (FKI), the rate of increase in the country’s minimum wage between 2016 and 2020 was the highest among 18 major Asian countries at an annual average of 9.2%.
According to the Korea Federation of SMEs, 95% of workers who are affected by the minimum wage are working for small and medium-sized companies with 300 or fewer employees. This means most of the workers, whose jobs are affected by the increase in minimum wage, are in the low income group working for small businesses. Last year, as many as 3.19 million workers did not receive the minimum age. There may be exploitative companies but many businesses just cannot cope with rising wages. If this trend continues, the income of the low-income bracket will be further reduced, inevitably increasing the gap between the rich and the poor.
No one would object to the idea of raising the minimum wage if businesses are able to afford it. But with the economy hit by the pandemic, an increase in the minimum wage means fewer jobs in the market. This is why the Korea Enterprises Federation proposed to minimize wage increases and add jobs instead. It is irresponsible for the KCTU to keep up the pressure on the government to raise the minimum wage despite the expected side effects of reduced jobs. The KCTU should look back on what is the best for workers and refrain from flexing its muscles.