The wages of North Korean workers employed by South Korean companies at Gaeseong(Kaesong) Industrial Complex in North Korea will be raised by 5 percent, the first such increase since the complex began operations in late 2004.

On August 3, the Gaeseong Industrial District Management Committee (KIDMC) said it has agreed with the North’s Central District Development Committee to increase the monthly wages to US$52.50 from $50. Both sides also agreed to annual negotiations on pay raises. If insurance costs are included, North Korean workers are to earn approximately $60.38 a month.

Since 2004, the wages of North Korean workers at the Kaeseong industrial park have been frozen. North Korea demanded a pay raise last year, but dropped the demand amid concerns over the North’s missile tests and subsequent nuclear test. This year, the North requested a 15 percent pay raise, but was said to have agreed on the 5 percent raise because labor regulations at the Gaeseong Industrial Complex ban pay raises of more than 5 percent on an annual basis.

Kim Dong-geun, head of the KIDMC, said “The 5 percent raise reflects the cooperation of the employers, allaying concerns over excessive pay increases. I hope the pay raise will help North Korean workers increase their productivity and improve the North’s administrative system, including customs, telecommunications and transportation.”