KDI "최저임금 인상 계속되면 득보다 실 크다"

South Korea's state-run economic institute highlighted the need for the government to consider slowing down, when it comes to raising the minium wage.
The KDI warns if the current pace continues, it could do more harm than good to the labor market.
Choi Si-young sheds light on the possible side effect.
The Korea Development Institute said the increases in the minimum wage in 2019 and 2020 will result in job losses.
The think tank projects that a 15% wage increase each year in 2019 and 2020 will lead to a drop in employment of nearly 100 thousand jobs in 2019,... and 140 thousand jobs in 2020.

The estimate is based on a case in Hungary where the minimum wage was increased by 60% between 2000 and 2004. It also assumes that there is no government support for small businesses hit hardest by the minimum wage hike.

The institute also highlighted how France in 2005 stopped raising its minimum wage once it reached 60% of the median wage due to the increased difficulty that low-wage earners had in finding employment. Korea's minimum wage in 2018 is already 55% of the median wage.

Recently, the Blue House said the 90% of the effects of the minimum wage increase are positive.
According to Yonhap News Agency, the top office made that calculation based on individual income, rather than household income, and excluding the unemployed and self-employed from statistics.

The Korea Development Institute also acknowledged that the minimum wage increase has so far had few side effects.
However, it warns that the government should monitor the effects of the minimum wage increase closely over the coming years.

Choi Si-young, Arirang News.