Wage Hike a Good Excuse to Quit Kaesong

Lee Sang Yong  |  2009-07-15 16:17
Predicting that Kaesong Industrial Complex talks will continue to rumble on ineffectually for some time to come, the North Korean authorities are threatening to unilaterally inform South Korean companies that North Korean workers wages will increase to $300 from August.

Representative of the Forum for Inter-Korea Relations Kim Gyu Chul revealed on Wednesday in a telephone interview with Daily NK, North Korean Kaesong Complex officials have told several South Korean entrepreneurs that since it seems hard to anticipate something coming from the working group meetings between North and South, they will unilaterally inform them of the wage increase from August regardless of existing laws and regulations.

Kim explained the path to the current situation, North and South negotiated wage rises of 5% in August 2007 and 2008, according to Kaesong Industrial Complex laws.

The owner of one company stationed in the Complex complained, This move may well be impending, judging by North Koreas general attitude. I hope the North gives me a good excuse to withdraw my company from the Complex, such as by raising wages to $300 or $500.

North Korea warned on the 10th in a notice from the Guidance Bureau for Developing Central Special Economic Zone, If South Korea does not fully accept our demands, we do not have any other choice but to put into practice what we have already decided.

North Koreas demand will be a blow to South Korean companies, whose businesses have already suffered due to constraint of overland passage and the detention of a North Korean employee.

If the wage were $300, as North Korea has demanded, the real wage would be almost $400, including $45 for insurance, $40-50 dollars in charges for food, snacks, traffic expenses and other sundries.

The company owner maintained, The Kaesong Industrial Complex has lost its business vitality and is breaking down. If North Korea issues the wage raise unilaterally, I think it will be a good chance to withdraw my company.

Another owner also emphasized, I have done my best to survive there thus far, but this month I dont have the ability to secure a loan. We are on the brink of collapse.
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