South Korean employers are lobbying for a 4.2 percent cut in next year’s minimum hourly wage to compensate for the damages caused by the near 30-percent jump in the minimum wage over last two years.

Representatives of business organizations including Korea Employers Federation, Korea Federation of Small and Medium-sized Businesses, and Federation of Middle Market Enterprises of Korea held a press conference in Seoul on Tuesday to demand a 4.2 percent slash to 8,000 won ($6.78) for the hourly base wage.

Kim Yong-geun, vice chairman of the Korea Employers Federation said, “Employers are still struggling to adapt to the sharp hike in the country`s base wage level over the last two years and they cannot afford higher labor costs.”

“We want to set the minimum wage level that even micro business owners can cope with,” he added.

The Minimum Wage Commission - tripartite panel representing the government, employers and workers – is soon to announce the statutory base wage level for next year. The difference remains wide with the employer side calling for a cut to 8,000 won while labor representatives argue an hourly wage of 10,000 won as promised by President Moon Jae-in during his presidential campaign.

The country’s minimum hourly wage rose 16.4 percent to 7,530 won in 2018 and another 10.9 percent to 8,350 won in 2019, under the liberal government’s drive to boost income of average Koreans.

“Economic conditions must be reflected in setting the minimum wage level,” Kim argued.

The last time employers demanded a cut in minimum wage was 2010 when the local economy was grappling with the 2008-2009 global financial crisis. In that year, the country’s economy grew a mere 0.7 percent after facilities investment plunged more than 7 percent.

They claim conditions these days are no better. Korea’s economy contracted 0.4 percent on quarter in the first quarter, the worst in a decade, and forced the government to cut its 2019 growth forecast to 2.4-2.5 percent from 2.7 percent.

Employers also argue current base wage level of 8,350 won per hour is already high - 60 percent of the country’s median wage level that is above the average of the members of the Organization for Economic Cooperation and Development. The Minimum Wage Commission must set the minimum wage terms for next year by Aug. 5.

By Han Ye-kyung and Cho Jeehyun

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