At the end of last year, the Ministry of Employment and Labor announced the Minimum Wage Act. According to the law, the minimum pay increased from 5,210 won to 5,580 won for one hour. Almost every employee agrees with it, but some employers do not.
pro
On December 27, the Ministry of Employment and Labor (MOEL) announced the Minimum Wages Act which increased the minimum wage from 5,210 won to 5,580 won from January first. This is 7.1% higher than last year. The MOEL designated some punishments if employers don’t comply with the minimum wage policy. For example, they will sentence violating employers to imprisonment for 3 years or a fine. The maximum amount is 20 million won. However, some owners do not want to spend more on wages for their employees. Nevertheless, increasing the minimum wage must be implemented.
First, the Korean minimum wage still belongs to the lowest group in the OECD. The revised wage is about $5.11, and this wage is much lower than some countries like Japan ($9.16), the UK ($9.57), France ($12.5), and the USA ($7.25). Even Greece ($5.79), which is in financial difficulties, offers a higher wage than Korea. If a worker works 8 hours a day, and 5 days a week, and be offers the minimum wage, he or she earns approximately $800 a month.(5580won * 8 hours * 5 days * 4 weeks =890,000won approximately $800) Such money is not enough to live in. According to a report from The Seoul Institute, The single-person household needs $1350 a month on average. As a result, workers are having trouble in their living with the minimum wage. Therefore, increasing is need.
Secondly, increases in the minimum wage in recent years haven’t followed the inflation rate in our society. The minimum wage rose 2,470 won in 9 years. However, many things in our daily life are also more expensive. Not only relatively cheap products such as food or cosmetics, but also expensive things like houses have been increasing. It is right to increase wages to balance increased prices. According to the consumer price index announced by the Ministry of Strategy and Finance, goods prices rose about 18.74% in 9 years. The wage increase is necessary to match the rising prices.
Small business may feel pressure due to the minimum wage hike. However, it is undesirable to still stay in 27th minimum wage in the OECD. Therefore, to improve workers’ lives, increasing the minimum wage is essential.
First, the Korean minimum wage still belongs to the lowest group in the OECD. The revised wage is about $5.11, and this wage is much lower than some countries like Japan ($9.16), the UK ($9.57), France ($12.5), and the USA ($7.25). Even Greece ($5.79), which is in financial difficulties, offers a higher wage than Korea. If a worker works 8 hours a day, and 5 days a week, and be offers the minimum wage, he or she earns approximately $800 a month.(5580won * 8 hours * 5 days * 4 weeks =890,000won approximately $800) Such money is not enough to live in. According to a report from The Seoul Institute, The single-person household needs $1350 a month on average. As a result, workers are having trouble in their living with the minimum wage. Therefore, increasing is need.
Secondly, increases in the minimum wage in recent years haven’t followed the inflation rate in our society. The minimum wage rose 2,470 won in 9 years. However, many things in our daily life are also more expensive. Not only relatively cheap products such as food or cosmetics, but also expensive things like houses have been increasing. It is right to increase wages to balance increased prices. According to the consumer price index announced by the Ministry of Strategy and Finance, goods prices rose about 18.74% in 9 years. The wage increase is necessary to match the rising prices.
Small business may feel pressure due to the minimum wage hike. However, it is undesirable to still stay in 27th minimum wage in the OECD. Therefore, to improve workers’ lives, increasing the minimum wage is essential.
By Choi Yu-jin
KMG Reporter
cscom170@kmu.ac.kr
KMG Reporter
cscom170@kmu.ac.kr
con
Last year, the minimum hourly wage was 5,210 won, but this year it increased to 5,580 won. There is controversy over this increase. Its supporters say we need to keep increasing the minimum wage because our minimum wage is not enough for employees to live on. However, the law enforcing the minimum wage is not strong and it can damage small businesses. Because of these two reasons, the increase has to be opposed.
First of all, the law enforcing the minimum wage has to become stronger. In 2014, several jobs could not get the minimum wage. The most representative job is a part-time job in a convenience store. In 2014, part-time employees in convenience stores received about 4,500 won an hour. However, they could not complain about this to their employers because they could lose their job. OECD research about real payment versus legal payment showed that in Korea, the minimum wage was 4,320 won in 2011, but the real minimum wage was 3,900 won. Therefore, the law is not obeyed even though it exists.
Next, increasing the minimum wage can have a negative effect on small businesses. Data from KOSIS (Korean Statistical Information Service) shows a decrease in sales in the manufacturing industry in about 25% between 2010 and 2013. However, labor costs were 8.53% of sales in 2010, and they increased to 9.05% in 2013. This shows that sales steadily decreased but wages increased. From 2010 to 2013, the average rise in the minimum wage was 4.98% and the number of employees who can benefit with the minimum wage increased by 8.7%. The income of companies is the same or decreased, but employers have to pay more wages every year. This can damage small businesses that cannot afford to give a number of employees’ wage and make them to fire employees or decrease their business size. Therefore, we have to freeze the minimum wage considering small-scale business.
The legal minimum wage is not observed by employers. We need to strengthen the law to enforce the payment of the wage first. Helping employees to speak out about unfair treatment will be the first step to strengthening the law. Moreover, the government should give a strong penalty to employers that do not abide by the minimum wage. Before the minimum wage is increased, the government has to minimize the damage to small business. Therefore, considering the law and small business, raising the minimum wage has to be opposed.
First of all, the law enforcing the minimum wage has to become stronger. In 2014, several jobs could not get the minimum wage. The most representative job is a part-time job in a convenience store. In 2014, part-time employees in convenience stores received about 4,500 won an hour. However, they could not complain about this to their employers because they could lose their job. OECD research about real payment versus legal payment showed that in Korea, the minimum wage was 4,320 won in 2011, but the real minimum wage was 3,900 won. Therefore, the law is not obeyed even though it exists.
Next, increasing the minimum wage can have a negative effect on small businesses. Data from KOSIS (Korean Statistical Information Service) shows a decrease in sales in the manufacturing industry in about 25% between 2010 and 2013. However, labor costs were 8.53% of sales in 2010, and they increased to 9.05% in 2013. This shows that sales steadily decreased but wages increased. From 2010 to 2013, the average rise in the minimum wage was 4.98% and the number of employees who can benefit with the minimum wage increased by 8.7%. The income of companies is the same or decreased, but employers have to pay more wages every year. This can damage small businesses that cannot afford to give a number of employees’ wage and make them to fire employees or decrease their business size. Therefore, we have to freeze the minimum wage considering small-scale business.
The legal minimum wage is not observed by employers. We need to strengthen the law to enforce the payment of the wage first. Helping employees to speak out about unfair treatment will be the first step to strengthening the law. Moreover, the government should give a strong penalty to employers that do not abide by the minimum wage. Before the minimum wage is increased, the government has to minimize the damage to small business. Therefore, considering the law and small business, raising the minimum wage has to be opposed.
By Jang Ah-hae
KMG Editor
ahhae628@kmu.ac.kr
KMG Editor
ahhae628@kmu.ac.kr
