Minimum Wage Hike 'Could Cost Half a Million Jobs'
15 November, 2018
A sharp increase in the minimum wage will cause some 470,000 jobs to be lost over the next four years as income disparity worsens, according to a study.
The Korea Economic Research Institute said in a report on Wednesday that if the minimum wage rises to W10,000 an hour by 2021, up to 476,000 jobs will disappear (US$1=W1,136).
KERI assumed the minimum wage will rise to W9,185 an hour in 2020 from the planned W8,350 for next year and to W10,000 in 2021.
Taking a paid weekly day off into account, the real wage will increase even further, causing 68,000 jobs to be lost this year, 98,000 next year, 156,000 in 2020 and 153,000 in 2021.
The job losses will exacerbate income disparity. If the minimum wage rises to W10,000 by 2021, the Gini coefficient, which is used to gauge economic inequality, is expected to rise 1.23 percent. The higher the coefficient, the greater the income disparity.
Cho Kyung-yeop, a KERI senior researcher, said, "The minimum-wage hike is being pursued to resolve income disparity but will actually make it worse."
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