Monday, November 29

“Minimum Wage Contributes 16.7% to Total Wage Growth in 2019”

Income-led growth committee and senior management committee discussion
“The role of raising the minimum wage and reducing wage inequality”
15.8% contribution to the 2018 wage growth rate
The argument that “the minimum wage for platform labor needs to be discussed”

On the afternoon of the 18th, the ‘Minimum Wage Policy Evaluation and Tasks’ policy discussion was held at the Euljiro Bank Hall in Seoul, hosted by the Special Committee on Income-led Growth and the Economic, Social and Labor Committee.

President Moon Jae-in was elected with a presidential election pledge of ‘the minimum wage of 10,000 won in 2020’, but next year, the last year of his term, the minimum wage was only 9,160 won. After taking office, he was criticized by the business community for a sharp increase in the minimum wage from 2018 to 2019, and this year it recorded the lowest rate of increase (1.5%). Studies have shown that it plays a significant role in At the ‘Minimum Wage Policy Evaluation and Tasks’ policy discussion held on the 18th, hosted by the Special Committee on Income-led Growth and the Economic, Social and Labor Committee, Professor Hwang Seon-woong of Pukyong National University said, “The increase in the minimum wage has contributed to the increase in the real hourly wage of all wage earners.” According to Professor Hwang, based on the wage and working hours data of the Labor Status Survey and Economically Active Population Survey by employment type in 2015-2017 before the sharp increase in the minimum wage and 2018-2019 after the sharp increase, the minimum wage increase is the result of an increase in wages for all wage earners. analysis of the effect on According to the presentation, the rate of increase in the real hourly wage of wage workers in 2018 and 2019 was 12.0% and 18.0% compared to 2017. It was estimated. Although the factors for wage increases for wage workers are diverse, such as productivity improvement and wage agreements, the minimum wage increase has the effect of raising the wages of all workers by 1.9% and 3.0%. Accordingly, the contribution rate of the minimum wage increase to the overall wage growth rate was analyzed to be 15.8% in 2018 and 16.7% in 2019. According to the minimum wage increase, hourly and monthly real wage increase rates were higher in the low-wage decile than in the high-wage decile, and the proportion of workers earning higher than the minimum wage increased, indicating that wage inequality has decreased overall. The wage gap between the top 10% and the bottom 10% of hourly wages (wage decile multiplier) has been narrowed from 4.57 in 2016 to 3.78 in 2019. The labor income share, which represents the share of national income returned to wage workers, also improved from 62.5% in 2016 to 65.5% in 2019. Professor Hwang asserted that “the increase in the minimum wage was a decisive factor in narrowing the gap, such as reducing wage inequality.” Professor Hwang said, “It is necessary to combine various policy measures other than the minimum wage to reduce wage inequality. It is necessary to promote various solidarity wage policies such as system improvement to strengthen protection of vulnerable workers, living wage and fair fees,” he said. At the discussion forum on the same day, there was also a discussion about the method of determining the minimum wage, which is continued each time the minimum wage is deliberated. Lee Seung-ryeol, a senior research fellow at the Korea Labor Institute, who gave the presentation, said, “It is necessary to review the introduction of a separate application of the minimum wage by industry by referring to foreign cases,” but pointed out that “the wage level of the minimum wage by industry should be higher than the single national minimum wage.” . “The development of platform labor is a new challenge for the minimum wage system,” he said. The Minimum Wage Act stipulates that the minimum wage can be set separately for ‘contracted work’, such as platform workers, who receive wages as a fee per case. By Park Tae-woo, staff reporter [email protected]



Reference-www.hani.co.kr

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