Koreas agree on Kaesong wage hike
Print Edition
South Korea said yesterday it had reached agreement with Pyongyang on a wage hike for North Korean workers at their Kaesong joint economic zone, ending a six-month dispute.
The breakthrough came despite inter-Korean tensions going through one of their sporadic surges after South Korea accused North Korea of engineering mine blasts that maimed members of a military border patrol.
The 5 percent hike will raise the minimum workers’ wage in Kaesong from US$70.35 a month to US$73.87, a spokesman for Seoul’s unification ministry said.
Monday’s agreement followed months of often testy negotiations prompted by Pyongyang’s unilateral announcement in February that a 5.18-percent pay rise would be implemented.
North Korea’s proposal exceeded a previously agreed 5 percent annual wage rise cap and Seoul responded by insisting that any such change had to be a joint decision.
On Monday, both sides agreed to discuss the remaining 0.18 percent raise later, the ministry said.
The Kaesong industrial estate, which lies just 10 kilometers over the border in the North, hosts about 120 South Korean firms employing some 53,000 North Korean workers.
Kaesong is a key earner for cash-strapped North Korea. The hard currency wages are kept by the state, which passes on a fraction — in local currency — to the workers.
The South Korean firms get cheap labor as well as preferential loans and tax breaks from the government.
Kaesong opened in 2004 and has generally managed to ride out repeated inter-Korea crises, even when every other avenue of cooperation was closed off.
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