Yonhap
7/27/2007
North Korea has demanded a 15 percent pay raise for its workers from South Korean companies at an inter-Korean industrial complex just north of the border, sources said Friday.
In a bid to press for their demand, the North notified South Korea that North Korean workers will refuse to work extra hours or on weekends and holidays starting from August, they said.
In the Kaesong industrial complex, North Korean workers earn about US$57 a month, including a $7 insurance payment, so their basic wages will increase to $66 if the North’s demand is accepted, according to officials.
No pay raise has been given since the complex began operations in late 2004, in spite of such demands being made several times.
“It seems like North Korea is demanding a pay increase accrued since 2004. We will decide on a pay raise at a reasonable level after consultations with the North Korean authorities,” a Unification Ministry official said.
Currently, 26 South Korean companies employ about 15,000 North Korean workers in Kaesong, including construction and office workers, at the site developed on a trial basis.
The number of North Korean workers is expected to increase to more than 350,000 when the complex becomes fully operational by 2012. Monthly production in the complex exceeds US$10 million.
“If the basic wage is increased to $66 and North Koreans work extra hours or weekends, South Korean companies will have to pay an average of $118 per month. Then the advantage of cheap labor in Kaesong will decrease,” said Kim Kyu-cheol, president of the South-North Korea Forum.
The industrial complex, the crowning achievement of a landmark summit between the leaders of the two Koreas in 2000, is one of the two major cross-border projects that South Korea has kept afloat in spite of United Nations sanctions on the the North following its nuclear weapon test in October. The two Koreas also run a joint tourism project at the North’s scenic Mount Geumgang.
