Finance minister hints at slowing pace of minimum wage hike

By Yonhap
  • Published : Sept 13, 2017 - 16:49
  • Updated : Sept 13, 2017 - 17:48
Finance Minister Kim Dong-yeon said Wednesday that the government will carefully review how much it will raise the minimum wage from 2019, indicating that the government may slow the growth pace to reflect various conditions.

In July, the government decided to raise the minimum wage by 16.4 percent to 7,530 won ($6.67) per hour next year, marking its biggest jump in nearly two decades.

President Moon Jae-in has pledged to increase the minimum wage to 10,000 won by 2020, as part of his efforts to narrow the income gap and boost private consumption. But small businesses say the sharp hike in the minimum wage would cut their profitability and actually hurt employment overall.
Finance Minister Kim Dong-yeon (L) speaks during a parliamentary interpellation session on Sept. 13, 2017. (Yonhap)

"The direction is clear that the minimum wage must be raised, but the government will carefully review the pace of increase after next year," Kim told lawmakers.

Kim also reiterated that the government has not considered collecting more taxes from big firms and wealthy people.

The government has recently unveiled a tax revision plan that would impose a corporate tax of 25 percent on businesses with taxable income of 200 billion won or more. Companies with income in the 20 to 200 billion won range will be subject to the current rate of 22 percent.

The proposed tax revision -- which is subject to parliamentary approval -- is also part of President Moon's efforts to help increase welfare-related spending, a key part of his agenda.

The government has also encouraged government agencies and private companies to hire more full-time employees to raise the job prospects for young people.

Kim told lawmakers that it would be impossible for the government to turn all of its part-time workers, or "non-regular" workers, into full-time employees.

Rather than allowing the government to hire some part-time workers, the government will make efforts to increase their compensation, Kim said.

Kim also said the government will give various incentives for private firms to hire more full-time workers. (Yonhap)