Recently, I saw a humorous Facebook posting. “We finally became much worthy than one green tea frappuccino.” Starting from 2018, the minimum hourly wage will rise from 6,470 to 7,530 won. Since we have never seen this steep increase, many expectations and worries cross. Therefore, as a student living in Seoul in the 21st century, how should we accept this policy? There are so many things to take a look at.
First, an increased minimum wage can lower employment rate. As a result, it can lead to a decrease in consumption. In fact, Korea Employer Federation (KEF) announced, “With the minimum wage increase, small and medium-sized companies, where 84.5 percent of minimum wage workers employed, are expected to bear heavy burdens of labor costs. All future issues will have to be responsible for those who make irresponsible decisions and labor unions that have selfish decisions.”
Second, the government said that they will prepare various measures to prevent side effects. They established financial support of four trillion won in relieving the burden on the management of the minimum wage increase. Especially, they said they will push to support additional wage rate which exceeds 7.4 percent of the recent five-year minimum wage increase rate. All these policies are bound to be taxed.
Actually, the representative of Liberty Korea Party, Jun Hee-gyeong criticized Moon Jae-in administration covering the hourly wage rising as an input of financial support. She said that the amount of financial aid the government would spend is a tax that is deducted from people’s own pocket. Actually, he is stealing money from the public. It is unspeakable to put financial resources predicting damages of small businessmen after rising minimum hourly wage.
I totally agree with raising the wage. Thanks to the policy, I will be able to prepare next year’s financial plan more freely. My friend will be able to lighten his burden since he can earn more money as he works for the same measure of time. However, we should not ignore the message of the con side's opinions. All of their sayings are logical and reasonable. We must watch this policy not to end up being just as “populism policy.” As the opposite said, if all the burden are taken to only small-middle size companies and citizens, we will not be able to regard this policy as a policy of people’s livelihood.
No one can give an exact answer to this question. The rise in wages in the market economy is essential and, at the same time, companies are always willing to make the biggest profit at lower cost.
However, that the effort to bridge between workers, business, and the gap between small and big capital are starting to emerge from the government is certain. We will have to pay a lot of attention and efforts to ensure that economic systems operate around the nation instead of a handful of large corporation.