Living Wage Must Expand to Private Sector through Various Incentives

[Suwon Ilbo=Park No-hoon] Opinions have emerged that expanding the 'living wage'—which the public sector applies at a higher rate than the minimum wage for workers' actual livelihoods—to the private sector requires various incentives such as subsidizing the gap between minimum wage and living wage, and providing resident tax exemptions to participating companies.

The Gyeonggi Research Institute announced on the 7th that it has published a report titled 'Gyeonggi Province Living Wage Requiring Expansion to Private Sector' containing these points.

A living wage is defined as a wage level at which workers can support their families while maintaining human dignity and achieving a practical standard of living—a broader concept than the minimum wage, which guarantees only a basic wage level to workers.

Next year's Gyeonggi Province living wage is set at 11,141 won per hour, which is 21.6% higher than the minimum wage of 9,160 won.

This is higher than Seoul's living wage of 10,776 won, representing the highest level in the nation. All 31 cities and counties in Gyeonggi Province currently implement the living wage system, with Seongnam City having the highest living wage at 11,080 won.

However, South Korea's living wage system has been limited to public sector workers and has not been activated in the private sector.

This contrasts with foreign countries such as the United Kingdom and Canada, where living wages are widely applied to financial companies and large corporations. While Gyeonggi Province operates a 'living wage pledge system' and 'living wage employer incentive points system' that grant bonus points to companies paying living wages in various corporate certifications and selections, the research institute noted that more proactive strategies are necessary at this point in time.

Accordingly, the institute proposed the following policy measures: ▲efforts to expand living wages through memorandums of understanding (MOUs) centered on public-natured workplaces such as universities, hospitals, and banks ▲compensation by Gyeonggi Province of the gap between minimum wage and living wage for socially vulnerable enterprises including social enterprises, disabled person enterprises, rehabilitation enterprises, and women enterprises ▲exemption of resident taxes (employee portion) at the city and county level for companies implementing living wages.

Kim Gun-soo, senior research fellow at the Gyeonggi Research Institute, stated, "Living wage expansion should be encouraged primarily in the private sector with public characteristics," and added, "It is necessary to provide both tangible and intangible incentives at a level that offsets the costs incurred in implementing living wages by companies, and to conduct publicity campaigns to raise awareness about living wage adoption from a medium to long-term perspective."