Small Firms Fear Minimum Wage Hike for Migrant Staff

      March 14, 2018 13:35

      Six out of 10 small and mid-sized company believe they will be hit hard by the minimum wage hike because of the high proportion of foreign workers they rely on.

      A survey by the Korea Federation of Small and Medium Business on 300 smaller firms published Tuesday shows 59 percent of companies fear a sharp increase in payroll expenses for foreign laborers.

      Although Korean staff earn higher base pay, foreigners are given more housing assistance and other benefits. SMEs spent an average of W41,000 per local worker in housing allowance but W181,000 per foreign worker, and that money is not included in the government's minimum wage calculations. They also spend W146,000 on food for local staff but W206,000 for foreign staff.

      The businesses said the labor productivity of foreign staff is about 87.5 percent of Korean workers' but their real pay is 96.3 percent.

      Lee Jae-won at the federation said, "With the sharp increase in minimum wage this year, we are witnessing reverse discrimination of Korean workers at small and mid-sized businesses. The payroll burden is intensifying, so the government should include food and lodging expenses in the way it assesses how the minimum wage is paid."

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