South Korea’s minimum wage will increase next year by 10.9 percent from this year’s level to 8,350 won ($7.4) per hour - a 29 percent jump under the liberal Moon Jae-in administration that promised to deliver a minimum hourly base of 10,000 won within three years.

The Minimum Wage Commission - a tripartite committee representing the government, workers, and employers - on Saturday confirmed next year’s guideline in the absence of employer representatives who boycotted the meeting in protest to another double-digit increase despite serious toll on jobs and employers.

The increase on the back of 16.4 percent hike from the beginning of this year would bump up monthly paycheck for an employee working 40 hours a week or 209 hours a month to 1.75 million won from this year’s 1.57 million won.

The proposed gain that requires endorsement from the Employment and Labor Minister after waiting for complaint until August 5 would go into effect from the beginning of next year.

The guideline stoked complaints from everywhere. The Korean Federation of Micro Enterprise that represents small merchants and self-employed businesses condemned the commission and government for ignoring the outcries from small merchants. Earlier, the members vowed to boycott the state-set wage base.

The labor side which demanded 10,760 won for next year’s wage base also vowed to strike against the government for “deceiving workers."

A country’s minimum wage that is binding to all business owners is designed to provide minimum or higher wage level for workers and protect low-wage workers. Violation of the statute can lead up to three years in prison and a maximum fine of 20 million won.

Minimum wage has been a heated debate in Korea as job losses have been heavy after the minimum wage was pushed up by 16.4 percent from this year as the keystone of the administration’s signature income-led growth policy. Job additions hovered slightly above 100,000 since February - the worst phenomenon since the aftermath of 2008 global financial crisis - resulting in job growth halved from a year-ago period. Tens of thousands of jobs were lost from the restaurant, retail, and hospitality segments that pay workers mostly on temporary and hourly basis.

By Sohn In-seon and Lee Eun-joo

[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]