SEOUL (REUTERS) - South Korean President Moon Jae-in said on Monday (Dec 17) that the government may take steps to cushion the effects from the sharp minimum wage increases of a combined 29 per cent over two years, which have led to a drop in low-paying jobs.
At a meeting of economy-related ministers, Mr Moon also said the government should aggressively remove hurdles to corporate investment, as weak domestic investment added downward pressure on an economy already grappling with slowing exports.
"It is important that new economic policies such as the minimum wage hike and workweek cut are pursued under a general consensus based on the tolerance and harmony of interested parties," Moon said during an extended meeting of economy-related ministers, Yonhap reported.
"If necessary, we need to devise ways to make adjustments."
He urged his officials to be cautious against key economic policies' possible adverse repercussions on society, and to adjust them if so.
The meeting was the first of its kind under Moon's presidency, Yonhap said. It was attended by new Finance Minister Hong Nam-ki, Education Minister Yoo Eun-hae, who doubles as deputy prime minister for social affairs, and heads of other key ministries and government agencies in charge of economy-related policies.
Raising the minimum hourly rate is one of Moon's core economic initiatives to re-shape the economy and deliver what he says is “quality” growth that is shared more broadly and not based on speculation..
The government has decided on a 10.9 per cent raise to 8,350 won (S$10.20) per hour for next year and been pushing to increase the threshold to 10,000 won by 2020.
But there have been growing calls for a revision to the record hike in minimum wage as it has hurt small businesses and is being blamed for the weakest job market in nine years.
The president, however, was unshaken about his push in overall economic policies for "inclusive growth" and called for patience and faith until the country reaches an outcome.
"We are changing the basis of our economic policy and while there may be disputes and questions, we need to wait with patience until it bears fruit," he said.
Moon also called on the officials to prove to the public with achievements that the policy is heading in the right direction, the presidential office Cheong Wa Dae said.