NK Demands Wage Hike in Kaesong

Korea Times
Lee Jin-woo

North Korea has urged South Korean manufacturers at the inter-Korean Kaesong Industrial Complex in the North to increase wages for some of the workers there, Unification Ministry officials said Tuesday.

The North demanded a 30 percent wage hike for university graduates working at the complex and a 10 percent salary increase for two-year college graduates, the officials said.

They said Pyongyang called for the different salaries to be dependant on a worker’s job and position.

As of Monday, a total of 13,032 North Koreans work at the complex. Some 10.6 percent and 11 percent of them graduated from universities and two-year colleges, respectively.

“Given the number of highly educated North Korean workers, approximately a four percent wage hike is expected this year,’’ an executive of a South Korean company at the Kaesong site said.

“Besides, we still face much difficulty in exporting goods especially to the United States due to the country of origin of the goods being the DPRK,’’ he said. DPRK stands for the North’s official name _ the Democratic People’s Republic of Korea.

Under the regulations on management of the Kaesong complex, which was agreed upon between the two Koreas in 2003, North Korean workers have been paid $57.50, a quite sizable amount by North Korean standards, per month, regardless of their position _ plus overtime pay.

The current regulations allow a five percent wage increase annually, but the North has not officially requested any wage hike until now.

Seoul and Washington have sought ways to pay North Korean workers directly not by paying North Korean authorities, which have a distinctive social and employment system.

Meanwhile, the North has demanded that South Korean visitors or residents at the Kaesong site, just north of the Demilitarized Zone (DMZ), pay registration fees.

The ministry has withheld the exact amount of money that Pyongyang has demanded, only saying there is a gap between the two sides.

But South Korean companies at the site are worried about the increasing financial burden due to such changes.

In the landmark free trade accord struck between the governments of South Korea and the U.S. on April 2, the two sides agreed to deal with the issue of recognizing Kaesong products as South Korean goods as part of OPZ (outward processing zone) talks in the future.

Unlike South Korean officials who have been positive about the future negotiations on the Kaesong goods, U.S. negotiators remain calm over the issue.

Of 39 South Korean companies at the joint complex, 22 have been operating under a pilot project.


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