Finance minister vows measures for small businesses over minimum wage hike

South Korea's top economic policy chief said Sunday the government will promptly come up with measures to relieve smaller businesses of the burden from a decision to hike the minimum wage for next year.

A panel representing the government, labor and management decided Saturday to raise the minimum hourly wage to 7,530 won ($6.64) for 2018, up 16.4 percent from this year. It is the highest on-year increase after a 16.6 percent hike in 2000. 

"The decision will be a huge momentum for an income-led growth, but it could put a heavy burden on small business owners," Finance Minister Kim Dong-yeon said during a meeting with economy-related ministers, vowing to promptly come up with measures for small and mid-sized business operators.

Earlier in the day, major corporate lobbies expressed concerns that the increase could worsen business conditions and hamper job creation.

"It was a decision that ignored small and mid-sized businesses which are already suffering from harsh economic conditions," an official at the Korea Employers Federation said.

"The minimum wage hike doesn't really have a direct influence on big business groups, but such a rapid hike could be regarded a signal that the current administration is siding with the labor circle more than with the business community," an official working at a local conglomerate said.

While the decision was largely seen as a victory for the labor circle, local union organizations also expressed disappointment, saying the amount still falls short of their demand.

The labor circles first proposed 10,000 won, or a 54.6-percent hike on year, while the management representatives suggested 6,625 won, a 2.4 percent increase. Their final proposals were modified to

7,530 won and 7,300 won, respectively, following government representatives' arbitration.

President Moon Jae-in has promised to increase the minimum wage to 10,000 won per hour before his five-year term ends in May 2022. (Yonhap)