[Citizen College Season 2] Minimum Wage Increase and Self-Employed Business

On November 23, 2018, the sixth lecture of “Citizen College Season 2: Complex conflict and reconciliation of Korean Society” was held by the Seongbuk Village Citizenship Education Center and the Korea University Peace and Democracy Institute (PDI). The sixth speaker was Professor Sung-Woo Lee of PDI.

In this lecture, titled “Minimum Wage Increase and Self-Employed Business,” the professor talked about income-driven growth and the relationship between the minimum wage and the self-employment. Wage-led growth aims to raise workers’ wages and encourage them to consume to achieve overall economic growth. Based on this, ‘Income-Driven Growth’ is the government’s economic policy that emphasizes wage increase and improvement of income distribution in various fields. In other words, the policy is aimed at a virtuous cycle in which income increases, consumer spending increases, and domestic production and investment increase. The minimum wage is the wage set by the government in order to guarantee the minimum level of payment which the workers receive, at a certain level of market wage. The minimum wage of 2018(7,530 won per hour) compared to the minimum wage of 2017 (6470 won per hour) has been raised by 16.4%. Due to the sharp rise in the minimum wage, small business owners are facing more serious management difficulties. However, the lecturer pointed out that the correlation between the rise in minimum wage and the fluctuation of self-employed business is not clear, and the super-increasing phenomenon of self-employment is to be examined from the 1997 financial crisis. Therefore, apart from the minimum wage, the characteristics of self-employed business is formed by itself, based on Korea’s economic environment. (Summary: Eun-Bi Lee)