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Minimum wage set to increase by 1,060 won or 16.4% to 7,530 won per hour in 2018, biggest hike ever

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Jul. 15, 2017

 

At its 11th plenary meeting held from 3:00 p.m. to 11:10 p.m. on July 15th (Fri.) at the government complex in Sejong, the Minimum Wage Commission (Chairperson Uh Soo-bong) passed a proposal to set the 2018 minimum wage at 7,530 won.

 

This represents an increase of 1,060 won or 16.4% from the hourly minimum wage rate of 6,470 won applying in 2017, the biggest hike ever.

 

It translates to a monthly salary of 1,573,770 won, an increase of 221,540 won compared with the previous year, for people who work 40 hours a week or 209 hours a month including paid weekly holidays.

 

The proposed minimum wage approved by the Commission is expected to affect more than 4.63 million people or 23.6% of all workers according to the Supplementary Results of the Economically Active Population Survey.

 

* It is expected to affect 2.77 million people or 18.0% of all workers according to the Survey on Labor Conditions by Type of Employment.

 

(Details of how the Commission ended up voting for the minimum wage proposal)

 

Having provided their first revisions at the 10th meeting on July 12th, the worker and employer commissioners said that they would submit their second revisions at the 11th meeting to be held on July 15th.

 

However, the worker commissioners changed their mind and said that they would submit their final revision, rather than making repeated revisions which they thought would be time-consuming, and requested the public interest commissioners to suggest a range of minimum wages in advance to promote deliberation.

 

In contrast, the employer commissioners argued that both sides should try to narrow the gap even if it requires repeated revisions.

 

The chairperson asked the worker and employer commissioners once again to provide their second revisions, saying, "The public interest commissioners will suggest a range of minimum wages to promote discussion at the request of both parties only where the worker and employer commissioners offer their revised amounts which are close enough to bridge the gap between them."

 

In response, the employer commissioners submitted their second revision behind closed doors, and the worker commissioners said that they would submit their second and third revisions all at once. When they returned after an adjournment, the worker commissioners offered an hourly rate of 8,330 won (a monthly rate of 1.74 million won, a 28.7% increase compared to the previous year) while the employer commissioners offered an hourly rate of 6,740 won (a 4.2% increase compared to the previous year) in their third revised proposals.
At around 11 o'clock at night after the public interest commissioners carried out last-ditch negotiations, shuttling back and forth between the two sides, the worker and employer commissioners finally proposed 7,530 won (a 16.4% increase compared to the previous year) and 7,300 won an hour (a 12.8% increase compared to the previous year) respectively.
The two final proposals were put to a vote.

 

As a result, the Commission passed the worker commissioners' proposal (7,530 won an hour, a 16.4% increase compared to the previous year) by a vote of 15 to 12 with all its 27 members present for the vote, thereby concluding its deliberation on the 2018 minimum wage. 

 

(Pursuit of institutional improvements, etc.) The Commission also decided to commission research on the application of different minimum wage rates depending on type of business, to discuss various institutional improvements demanded by employers and trade unions so far and to hold open debates, etc.,  in the second half of this year. 

 

(Future schedule) Once the proposed minimum wage for 2018, which was approved by the Commission today, is submitted to the Minister of Employment and Labor, the Minister will announce it immediately upon receipt and give workers' and employers' representatives at least ten days to raise an objection. If no objection is raised, he will finally determine and announce the minimum wage no later than August 5th 2017.

 

In his closing remarks at the plenary session, the chairperson of the Commission expressed his impression so far of this year's minimum wage deliberation by saying, "The minimum wage decision made today is not a decision slanted toward one side but a win-win decision reached through pain-sharing between labor and management after intense discussion and consideration about a sustainable minimum wage level that not only allows our society to take a step forward but it can also afford."

Last Modifide Date   :   Tue August 8, 2017
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