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S.Korea, DPRK still in deadlock on wage hike for economic zone

Xinhua, April 20, 2015 Adjust font size:

South Korea and the Democratic People's Republic of Korea (DPRK) is still in deadlock on the issue for wage hike of DPRK workers in the joint industrial complex in the DPRK's border town of Kaesong.

Unification Ministry spokesman Lim Byeong-cheol told a press briefing on Monday that there is no change in the government's stance that South Korean companies running factories in Kaesong should pay monthly wages at the current level, reiterating that the DPRK made a unilateral decision to raise wages in violation of the inter-Korean agreement.

The DPRK revised labor regulations on the Kaesong industrial complex in November 2014 without consultations with South Korea, notifying the South side of its decision in late February.

Under the revision, the minimum wage for DPRK workers in Kaesong will be raised from 70.35 U.S. dollars to 74 dollars starting from March. The March wage should be paid by April 20.

It was a 5.18 percent increase, surpassing the 5 percent ceiling that the two Koreas agreed to set as a guideline for an annual wage hike. Including social security contributions, average monthly wages for DPRK workers would total 164.1 dollars, up 5.53 percent from the current 155.5 dollars.

Seoul instructed companies in Kaesong not to pay the increased wages, warning an administrative penalty unless the companies follow the instruction.

Meanwhile, Seoul and Pyongyang reconfirmed different positions on the wage issue during the second contact on Saturday between South Korea's management committee for the factory park and the DPRK's General Bureau for Guidance to Central Special Economic Zone Development. The first contact was made on April 7.

Amid the inter-governmental gridlock, the DPRK offered to the South Korean companies paying the current 70.35 dollars as the minimum wage first and the remainder of the increased wages later, Yonhap News Agency reported, citing company officials.

The Kaesong industrial zone is the last remaining symbol of inter-Korean economic cooperation, where some 120 South Korean companies are operating factories and hiring 53,000 DPRK workers. Endi