Minimum Wage Soars, but "Lowering Large Corporations' Salaries for Solidarity Wages"..."Anti-Market Idea"

Sojugseong Special Committee & Gyeongsanowi Forum
Purpose to Eliminate Wage Gap... Experts Say "Anti-Market Idea"

Kim Yuseon, Chairperson of the Special Committee on Income-Led Growth. (Image source=Yonhap News)

[Sejong=Asia Economy Reporter Moon Chaeseok] The Moon Jae-in administration, which raised the minimum wage from the 6,000 won range to the 9,000 won range per hour, has now proposed lowering the wages of high-income earners to reduce income disparity. Concerns are being raised that this could not only undermine corporate competitiveness due to the rapid minimum wage increase but also dampen the work motivation of high earners. In particular, considering Korea’s labor-management negotiation system centered on company-level labor unions, critics argue that this idea lacks practical effectiveness.

On the 7th, Kim Yuseon, Chairperson of the Presidential Committee on Income-Led Growth, said at a forum on ‘Solidarity Wage Policy to Resolve Wage Gaps,’ co-hosted with the Economic, Social and Labor Council at the Bankers’ Hall in Jung-gu, Seoul, “To eliminate wage inequality and improve the dual structure of the labor market, it is necessary to promote a ‘solidarity wage policy’ by combining various policy measures beyond just the minimum wage.”

The solidarity wage system is a framework that guarantees workers performing the same job receive the same wage regardless of company size, profits, or industry, and it has long been a demand of the labor sector. To this end, Chairperson Kim argued, “High-income earners such as CEOs should set wages commensurate with their social responsibility, and cross-company negotiations beyond individual corporate units should be promoted.” The intention is to reduce the income of high earners and resolve inequality through industry-level negotiations between large and small-to-medium enterprises.

Moon Sunghyun, Chairperson of the Economic, Social and Labor Council, also emphasized in his greeting remarks that “the world will change only if large corporations and regular workers take the lead in practicing solidarity,” highlighting the need for cooperation from high-income earners.

However, this idea is evaluated as conflicting with the market economy system where income is based on ability. Choi Young-gi, former President of the Korea Labor Institute, pointed out, “The practical means of the solidarity wage policy is not to raise the wages of low-income workers but to lower the wages of high-income workers,” adding, “Considering Korea’s unique negotiation system centered on large company unions, it is realistic to regard this as an idealistic idea.” Oh Gyetaek, Director of the Wage and Job Innovation Center at the Korea Labor Institute, said, “While the purpose and intent are understood, it is uncertain whether the middle class and above will accept this,” and noted, “The feasibility is low.”

A source from the Income-Led Growth Special Committee said, “It is necessary to change the CEO compensation system,” but added, “It is not something that can be enforced.”

This content was produced with the assistance of AI translation services.