[Newsmaker] Both employers and hard-line labor groups disgruntled with new minimum wage

The Minimum Wage Commission's decision on Monday to raise next year's minimum hourly wage 5.1 percent to 9,160 won ($7.98) drew heavy criticism from employers' and hard-line labor groups.

Officials at the Federation of Korean Trade Unions (FKTU), the more moderate of South Korea's two major umbrella labor unions, said Tuesday they will accept the state commission's minimum wage decision.

But the Korean Confederation of Trade Unions (KCTU), an umbrella union known for its militant labor movement, expressed dissatisfaction at the deal and threatened to launch a tough fight for higher wages.

KCTU officials said they have been virtually deceived by the Moon Jae-in government, which had promised to hike the minimum hourly wage up to 10,000 won during its term set to end in May next year.

"A sharp increase in the minimum wage was inevitable to resolve the inequality and polarization worsened by COVID-19. (Next year's minimum wage) can hardly be accepted and discussed," a KCTU official said.

"The KCTU will stage a general strike and other protests in the second half to ease inequality and polarization, and bring about a great transformation in Korean society," the official said.

As expected, the local employers' groups expressed strong regrets at a 5.1 percent hike in next year's minimum wage.

The Korea Enterprises Federation issued a statement saying next year's minimum wage clearly exceeds the payment capabilities of small and midsized companies and small merchants.

"Responsibility for all problems arising from this should be borne by commission members representing public interests and the labor circles which have continued selfish struggles in disregard of the economic reality," the federation said.

The Federation of Korean Industries, a major business lobby group, also expressed regret saying local entrepreneurs, as well as small business owners and the self-employed, could be driven to a critical situation and the unemployment crisis is feared to worsen.

The Korea Federation of Small and Medium Business, which represents small companies that will be hit hardest by the minimum wage increase, poured out strong criticism.

"Small and medium-sized enterprises have done their best to overcome managerial difficulties and maintain jobs amid the COVID-19 pandemic, but their basic physical strength has been exhausted due to the prolonged crisis management," the federation said, stressing that shocks from the wage hike will be inevitable.

"Small and medium-sized companies and merchants may go out of business due to excessive labor costs, which will lead to a decrease in jobs for the underprivileged," it said. (Yonhap)