Two Koreas row over wages in joint industrial complex

North Korean workers at a garment factory within the Kaesong Industrial Complex. North Korea notified South Korea on Thursday, Feb 26, 2015, of a raise in the minimum wage for workers in the joint complex, a unilateral move immediately rejected by Se
North Korean workers at a garment factory within the Kaesong Industrial Complex. North Korea notified South Korea on Thursday, Feb 26, 2015, of a raise in the minimum wage for workers in the joint complex, a unilateral move immediately rejected by Seoul. -- PHOTO: ANDREW SALMON

SEOUL (AFP) - North Korea notified South Korea on Thursday of a raise in the minimum wage for workers in their Kaesong joint industrial complex, a unilateral move immediately rejected by Seoul.

The South's Unification Ministry said it had received a faxed message stating that the basic salary for the 53,000 North Korean workers in the complex should be increased by just over 5 per cent from March 1 to US$74 (S$100) a month.

The workers are employed in more than 100 South Korean-owned factories producing goods from clothes to watches.

The North Korean wage demand would increase the average monthly sum the South pays for each worker - including allowances, welfare and overtime - from US$155 to US$164.

The Unification Ministry said the unilateral increase was unacceptable, citing an existing agreement that any wage rise had to be agreed by a joint committee overseeing the management of Kaesong.

"However, the North has refused to hold negotiations with our side," a ministry official told AFP.

A precious source of hard currency for the impoverished North, Kaesong has largely been spared the fallout from the regular eruptions in relations between the two Koreas.

But in April 2013, the North effectively shut down the complex by withdrawing its workforce during a spike in military tensions that followed the North's third nuclear test.

Kaesong reopened five months later and, in an effort to prevent future closures, the two sides created the joint committee to deal with any problems related to its operations.