UPDATE : 2020.8.6 목 15:54

[Vol. 76] Beyond the minimum wage system

황동욱 기자l승인2016.11.30l수정2017.11.26 19:24






The Minimum Wage system is always on the cutting edge of dispute. Since it was enacted in 1987, disputes about the act have come up unceasingly. The focus of the disputes is mainly about whether or not the law secures the labor welfare, which is the purpose of the enactment of the law in the Article 1 of Minimum Wage Act. In the aftermath of the disputes, a lot of concerns were voiced about the effectiveness of the current wage system thereby the need for plan B was also brought up. Consequently, some alternatives which can supplement or substitute for the current wage system are undergoing tests in both Korea and worldwide.

For example, since its first introduction on Nowon-gu and Seongbuk-gu, Seoul in 2012, over 80 local governments including both regional and basic in Korea have executed the Living Wage system. It is a wage system which features the supplement of a partial deficit of the minimum wage system starting from the public sector. Furthermore, the Universal Basic Income, a somewhat future-oriented wage system that can substitute for the minimum wage system, will be executed on a trial basis in Finland from next year.

A wage system focused on living, not minimum

From next year, the officers working in Gwangsan-gu Facilities Management Corporation in Gwangju Metropolitan City will get at least 8,600 won per hour. This amount is 27 percent higher than next year’s national minimum wage, which is 6,470 won. Why do they receive their wages in accordance with another standard? The answer can be found in the living wage system.

In the current situation, it seems that the minimum wage system does not adequately fulfill its purpose, which is a diminution of the workers’ low pay and income inequality. Consequently, the needs for a system that can achieve the purpose better than minimum wage system came up. According to the needs, more than 80 local governments in Korea have been executing or considering the living wage system. Living wage is an amount of wage workers are paid for their job that is large enough to provide them with the necessary things needed to live an acceptable life. In fact, it is being evaluated as a wage system that can supplement the minimum wage system. When the policy decision–makers, who are related to living wage system determine the amount of wage, they collectively consider workers’ housing, educational and cultural expenditures. By means of considering those expenditures, it can substantially ensure the livelihood of employees in wage levels that can be maintained with acceptable human life.

Although it stepped forward to advanced wage system, it has structural drawbacks. The system is being executed on a trial basis by starting from the public sector in Korea. Therefore, the workers in private sectors cannot have those benefits. If the more local governments begin the living wage system on a trial basis only for workers in public sector, the inequality becomes more severe.

Universal Basic Income, a plan for the future ahead

On October 12th, Barack Obama, the President of the United States, said “Low-wage, low-skill individuals become more and more redundant, and their jobs may not be replaced, but wages are suppressed. And if we are going to successfully manage this transition, we are going to have to have a societal conversation about how we manage this” … “I don’t know what you think about universal basic income, but as we start to see people getting displaced, there’s also this idea that we can look at other models.”

As advances in industry and technology all over the world call out the industrial automation, so- called “Growth without Jobs” phenomenon, workers today face the instability of their employment. To overcome this trend, a new conceptual wage system that can substitute for any current wage systems has been brought up: Universal Basic Income. Without any strings attached such as social status and occupation, and so on, universal basic income system gives all the people in the nation some amounts of cash monthly. Even though this system seems to be quite different from minimum wage, their objectives are same: lessening the income inequality. In Korea, the discussion about the system is still in its beginning stages. For instance, National Assembly Research Service(NARS), a government organization whose primary function is investigating, researching about the legislation and national policy, posed the necessity of universal basic income in this year. They said manufacturing industry in Korea accounts for more than 50% in the whole industry, which can lead to being significantly influenced by industrial automation. However, there are not sufficient social security systems that can deal with mass unemployment, so NARS insist that the introduction of universal basic income in Korea is worth considering.

Still, there are some limits to this system. First, the source of payments that the government gives people would be a tax, so some people might think that it is meaningless as their tax pass between the government and them. Second, it can demotivate the workers by giving them unconditional rewards thereby it could be disharmonious with the current market economy system.

On June 5, 2016, Switzerland had a referendum on the introduction of the universal basic income nationally for the first time in the world. Although the 78 percent of Switzerland voters rejected a proposal, the referendum itself seems to be significant: it can be regarded as a struggle to innovate the existing wage system. Likewise, the lively arguments about the minimum wage system in several aspects, as well as the introduction of living wage and universal basic income, could be seen as people’s efforts to go back to the basics: assurance of the basic standard of living for all the people. Therefore, it is thought that the times will come where everybody lives at least with a basic level if such efforts continue without ceasing.

황동욱 기자  marni1@naver.com
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