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Gov. accelerates the pace of minimum wage hikes

Posted December. 25, 2018 07:40,   

Updated December. 25, 2018 07:40


The deliberation of the revised enforcement ordinance of the Minimum Wage Act was postponed Monday at the Cabinet Meeting presided by Prime Minister Lee Nak-yeon to be discussed at the last cabinet meeting of the year on Dec. 31. The revised act submitted by the Ministry of Employment and Labor suggests increasing the working hours from the current 174 to 243 hours a month, including the “legal paid rest (Sundays and holidays)” and the “agreed paid rest (Saturdays).” At the meeting, the Ministry of Employment and Labor was told to revise the act again, excluding the agreed paid rest and including only the legal paid rest, before making a pre-announcement of the act and submitting it again to the National Assembly.

A minimum wage is calculated based on the number of hours an employee worked in a month. Therefore, the wage will be increased if working hours expand. Even though the agreed paid time-off is excluded in calculation, monthly working hours amount to 209 hours, which will result in a 20 percent increase in the minimum wage. The minimum wage has risen by 30 percent since President Moon Jae-in took office. This means there will be a 50 percent jump in the minimum wage next year. It is understandable that the business circle said in its official statement they are “deeply frustrated and even feel it is unfair.”

We are already witnessing diverse side effects of a 30-percent increase in minimum wage, such as poor employment rate, reduced income for the low-income bracket, and closure of business by countless self-employed people. At an extended meeting with economy-related ministers last Monday, President Moon hinted at slowing down the pace of the steep minimum wage hikes. "It is important to introduce new economic policies such as a minimum wage increase based on the tolerance and harmony of interested parties,” the president said at the meeting, adding that he would take complementary measures if it is deemed necessary. The revised enforcement ordinance of the Minimum Wage Act the government is pushing for at the moment, however, is far from putting the brakes on minimum wage hikes. It is rather pushing an accelerator.

The Supreme Court precedents only acknowledge the number of hours an employee actually worked as working hours. But the Ministry of Employment and Labor is revising the enforcement ordinance in the hope of changing the court’s ruling in their favor. Changing the standard of working hours is an issue as important as deciding the scope of paid rest. The National Assembly should decide the standard of working hours so that the Ministry of Employment and Labor cannot change it at its will against Supreme Court precedents.