Korea's finance minister met with leading business groups this Friday... and urged companies to raise salaries as a way to boost sagging domestic consumption.
But he had to face some resistance from Corporate Korea.
Ji Myung-kil has more.
Finance Minister Choi Kyung-hwan has once again called for a wage hike in order to revitalize sagging domestic consumption, which is pulling down the nation's economic recovery momentum.
Choi emphasized the need for smaller subcontractors to raise minimum wage... and for large conglomerates to support these subcontractors in employee payment.
The finance minister, who is also the deputy prime minister, asked the business community to increase youth employment and urged companies to participate in major investment projects,... as the government is willing to support long-term risk.
In response, business leaders told the minister that they understand the government's commitments to revitalize the economy, but cautioned that any move to hike wages... could affect their international competitiveness and undermine exports.
Park Yong-maan, the head of the Korea Chamber of Commerce and Industry, said the minimum wage issue should be discussed in tandem with a long-term master plan... and that since Korea has a smaller domestic market than the U.S. and Japan,... a hike in the minimum wage will hamper corporate competitiveness.
As companies are the main source of investment and employment,... the government has been pressing them to return more of their profits to workers and shareholders, with the hope it will give them extra money to spend.
Stagnant wages, rising household debt and the aging population has weighed on domestic consumption, and companies have become more reluctant to invest and give employees a wage hike.
Minister Choi reaffirmed that there will be no corporate tax hikes, as such a move is expected to have negative effects on corporate investment and hurt Korea's global competitiveness.
Ji Myung-kil, Arirang News.
