Korean Minimum Wage Suggestion by President Moon Evaluation
Verified
Added on 2023/05/30
|6
|1411
|486
AI Summary
This article evaluates President Moon's suggestion to hike the Korean minimum wage, discussing the current state of minimum wages in Korea, the need for an increase, and the potential benefits of such an increase.
KOREAN MINIMUM WAGE SUGGESTION BY PRESIDENT MOON EVALUATION1 KOREAN MINIMUM WAGE SUGGESTION BY PRESIDENT MOON EVALUATION Student Name Institutional Affiliation Facilitator Course Date
Secure Best Marks with AI Grader
Need help grading? Try our AI Grader for instant feedback on your assignments.
KOREAN MINIMUM WAGE SUGGESTION BY PRESIDENT MOON EVALUATION2 Introduction Korea is among the richest nations in the Asia Pacific region having been ranked position seven out of the forty three nations in the region (Moo‐Ki, 2012). Korea embraces a free economy with a score of 73.8 of economic freedom and is ranked position 27 in terms of economic freedom according to the 2018 Index. The Korean economic growth score is above the expected world and regional averages. Corruption has been intense in Korea and even led to impeachment of President Park Geun-hye and President Moon Jae-in was sworn in. the current government has focused on moving the economy from supply-side or rather export dependence to more of populist spending. This has made it necessary for better pay to Korean employees. Discussion Generally, minimum wages refer to the pay that employees should receive from their employers as remuneration for the work they perform over a given period of time. Minimum wages are set in order to protect the employees from being mistreated by their employees by being paid poorly. Minimum wages also minimize poverty and income disparity by stating equal pay for work which has equal value. In Korea, minimum wage rates for each year are proposed by the Minimum Wage Council which consists of 27 members. It’s made up of representatives of three bodies namely the government, employers and the employees (Park, Lim, Sams, Nam and Park, 2011). The final rates are however determined by the Ministry of Employment and Labor depending on the prevailing market conditions and set economic goals and policies. According to the Organization for Economic Cooperation and Development, Korean minimum wages have been lagging behind as compared to the other nations such as Australia which is in the same region. This is despite the fact that the Korean minimum wages have been increasing
KOREAN MINIMUM WAGE SUGGESTION BY PRESIDENT MOON EVALUATION3 each preceding year. This therefore necessitates the need for Korean minimum wages to be raised if at all the nation wishes to foster its economic growth at a fast rate (Chang, 2011). The following graph shows the Korean minimum wages from the year 2008 to 2018: 200820102012201420162018 3000 3500 4000 4500 5000 5500 6000 6500 7000 7500 8000 Korean Minimum Wage Rate per Hour from 2008 to 2018 Minimum Wage Rate per Hour Year Minimum Wage Rate per Hour The above diagram shows that minimum wage rates per hour in Korea have been increasing but still it lags behind in the OECD countries ranking. This means that still much needs to be done and minimum wage increments will help foster economic growth in Korea. The purchasing power parity of the Korean consumers is too low compared to other nations such Australia, United States and United Kingdom among others (Taylor and Taylor, 2014). This means that Koreans can only purchase a few goods based on their level of income. The purchasing power parity measures the value of a basket of goods across nations in monetary terms. For example, comparing the purchasing power parity of Korea and Australia for the year 2017, the values were 6.7 and 11.3 respectively. This means that one can almost purchase two
KOREAN MINIMUM WAGE SUGGESTION BY PRESIDENT MOON EVALUATION4 times a commodity in Australia than he would otherwise purchase it in Korea. This therefore means that based on the current prices of goods and services in Korea, the Korean Citizens can only purchase very little based on what they are paid. The prices in Korea are higher compared to the minimum wage rates and hence it would be okay for the minimum wages to be raised according to President Moon suggestion or even be raised higher. The minimum wages have further been criticized by the fact that a worker being paid the minimum wage can only purchase a newspaper and a packet of cigarettes after working for an hour. This therefore necessitates the need for the minimum wages to be raised in order to raise the standards f living for the Korean citizens. The suggestion of President Moon to raise the minimum wages by 16 percent is right due to the fact the government has promised to assist the small business to cater for the extra costs involved due to the increase. Although the suggestion might have adverse effects on small businesses which may force them to retrench some workers, the government has promised to assist them with financial aids to cater for the worker’s increased pay. Small businesses can also cater for the increased wages by raising their retail prices. Therefore the decision to raise the minimum wages will be okay as the small businesses which most of times are affected by such decisions will be assisted to meet part of hiked wage payments. From the social welfare view, the social welfare system of Korea is weak. Most of the Korean citizens depend much on the income they earn from their employers (Kwon and Holliday, 2017). The suggested increment in minimum wages can only support a family of three to cater for their basic needs and still be straining with nothing left for investment or even saving according to the Korean Confederation of Trade Unions. It will thus be wise to increase the minimum wages to
Paraphrase This Document
Need a fresh take? Get an instant paraphrase of this document with our AI Paraphraser
KOREAN MINIMUM WAGE SUGGESTION BY PRESIDENT MOON EVALUATION5 improve the living standards of the Korean citizens and enable them to live comfortably having catered for at least all their basic needs. It is also reasonable for the minimum wages to be hiked due to the fact that the wage rise may actually increase employment. Many markets in Korea are composed of only a few firms. This therefore means that from the monopoly market point of view which consists of only a few firms in the market the rise in the minimum wages can actually raise employment rather than killing jobs. The hiking of the minimum wages motivates employees to work hard in their daily activities (Seguino, 2016). When the minimum wages are raised, many employees are likely to work harder as the grass becomes greener in order to match their productivity with their pay. This will help to raise the general productivity in the entire economy and hence contribute much towards economic growth. In a nutshell, the suggestion by President Moon of hiking the minimum wages is okay as it is more advantageous more so towards improving economic growth of Korea. The suggestion should be implemented in order to improve the Korean citizens living standards and the economy as a whole. References Chang, H.J., 2011. Korea: the misunderstood crisis.World development,26(8), pp.1555-1561. Kwon, S. and Holliday, I., 2017. The Korean welfare state: a paradox of expansion in an era of globalisation and economic crisis.International Journal of Social Welfare,16(3), pp.242-248.
KOREAN MINIMUM WAGE SUGGESTION BY PRESIDENT MOON EVALUATION6 Moo‐Ki, B.A.I., 2012. The turning point in the Korean economy.The Developing Economies,20(2), pp.117-140. Park, S.J., Lim, Y.S., Sams, S., Nam, S.M. and Park, H.W., 2011. Networked politics on Cyworld: The text and sentiment of Korean political profiles.Social Science Computer Review,29(3), pp.288-299. Seguino, S., 2016. The effects of structural change and economic liberalisation on gender wage differentials in South Korea and Taiwan.Cambridge Journal of Economics,24(4), pp.437-459. Taylor, A.M. and Taylor, M.P., 2014. The purchasing power parity debate.Journal of economic perspectives,18(4), pp.135-158.