What matters most amid the COVID-19 pandemic is to keep jobs
The country's minimum hourly wage for 2021 has been set at 8,720 won ($7.25), up 1.5 percent from this year. This is the smallest increase since the minimum wage system was first introduced in 1988, and even falls short of the 2.7 percent increase in 1998 during the Asian financial crisis.
During the ninth session of the 27-member Minimum Wage Commission held early Tuesday morning, all nine union representatives boycotted the vote. Out of the 16 votes cast, nine voted in favor of a proposal to the wage by 1.5 percent put forward by the public interest representatives while seven opposed it.
Negotiations to set next year's minimum wage were particularly tough owing to the economic malaise caused by the COVID-19 pandemic. The coronavirus crisis has been taking a heavy toll on low-income workers, so the union side has every reason to demand a jump in the minimum wage, the only lifeline for employees in difficult times like these.
Yet the public interest representatives stood by management, considering that many self-employed business owners are in dire straits because of the prolonged coronavirus situation. The 1.5 percent rise was set based on a 0.1 percent growth outlook for 2020, a 0.4 percent consumer price rise for 2020 and a 1 percent hike factoring in the need to improve workers' livelihoods. Given that the Korean economy is expected to contract this year, the moderate rise may be satisfactory. Furthermore, the minimum wage has increased nearly 33 percent over the last three years.
What matters most at this point is to keep jobs instead of wage hikes. No one can dispute that workers exist only when companies stay afloat. Unions should understand that many small business owners are on the brink of collapse. Employers, for their part, should do whatever they can to retain jobs, acknowledging the moderate minimum wage increase.