Putting brakes on wage hike

Workers need to share burden of economic slump

The minimum wage will rise 2.9 percent next year, the lowest increase since 2010. This modest hike reflects the stark reality that employers, particularly smaller businesses and the self-employed, are going through difficulties amid the prolonged economic slowdown.

On Friday, the Minimum Wage Commission voted to set the 2020 minimum wage at 8,590 won ($7.32) per hour, compared with 8,350 won for this year. The growth rate is far lower than the 10.9 percent for 2019 and 16.4 percent for 2018.

The decision means that President Moon Jaein cannot keep his campaign promise to push up the minimum wage to 10,000 won by 2020. It is a setback not only for Moon, but also for workers, especially low-income laborers. But it is inevitable to put the brakes on the steep hikes of the past two years, given the deteriorating economic conditions.

Therefore, both employers and workers need to accept the wage hike. It can be said that employers have emerged as winners in the hard negotiations; but workers do not necessarily feel that they are the losers.

Of course, the union representatives failed to achieve their final goal of increasing the minimum wage by 6.8 percent. But they should keep in mind that the wage increased by nearly 30 percent over the last two years. If the economy were back on track, the growth rate would be higher than 2.9 percent for 2020.

The nation's two umbrella unions are threatening to stage a strike to protest what they claim is too low an increase. However, it would be better for them to refrain from engaging in excessive struggles to maximize their interests.

Instead, it is time for management and labor to work together to improve productivity and promote innovation under a win-win strategy.

As for the government, President Moon should feel sorry about reneging on his promise. He needs to talk frankly to the people about his failure and seek public understanding in regards to this matter.

Then the government needs to acknowledge its policy blunders related to Moon's "income-led" growth policy of boosting incomes for workers, expanding consumption and production, and raising economic growth. It should pull out all the stops to create more jobs, especially for the poor, and speed up economic recovery.