S.Korea to raise minimum wage by 2.9% in 2020, smallest hike in decade
SEOUL, July 12 (Reuters) - South Korea on Friday said it
plans to raise the nation's minimum wage by the smallest amount
in a decade, as large increases in the past two years backfired
on the government with the slump in crucial low-paying jobs in
the manufacturing and services sector.
The Minimum Wage Commission agreed on an increase of 2.9% to
8,590 won ($7.32) an hour for next year, the smallest rise since
a 2.8% hike in 2010.
It raised the minimum wage by 10.9% and 16.4% this year and
last year, respectively, to boost private consumption and help
narrow income equality.
However, the combined 29% hike in the nation's mandatory
minimum wages over two years led to a drop in low-paying jobs
across manufacturers, construction and retail sectors already
struggling from cooling global demand.
South Korea's finance ministry cut its annual growth target
to 2.4-2.5%, a seven-year low, after the economy shrank a
seasonally adjusted 0.4% in the first quarter - the worst since
the global financial crisis as global trade tensions and slowing
domestic demand took a toll.
South Korea's labour-friendly President Moon Jae-in has
pledged to raise the minimum wage by 55% to 10,000 won per hour
by 2020, but he apologised last year saying that it could be
difficult to fulfil his pledges.
($1 = 1,173.2100 won)
(Reporting by Joori Roh
Editing by Shri Navaratnam)
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