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North Korean workers get back to work at a factory in the Kaesong Industrial Complex

By Ha Eo-young, staff reporter

North Korea is demanding talks toward a 10% hike in wages for its workers at the Kaesong Industrial Complex.

The 10% total includes two regular annual 5% rises, one for 2014 and one for last year, when wages were not raised because of a long-term shutdown at the complex. South Korea’s Ministry of Unification is now indicating that it will not agree to the hike as a matter of principle.

Ministry spokesman Kim Ui-do reported on Mar. 14 that North Korea’s Central General Bureau for the Central Guidance to the Development of Special Zones, its body in charge of administration of the Kaesong complex, recently proposed talks toward a 10% wage hike for North Korean workers.

“Last year, we were unable to hold discussions on the regular 5% raise that occurs every July because the Kaesong Complex was shut down [from April to September],” explained Kim. “Now they are asking for a 10% raise, including the 5% for last year.”

The South Korean government does not plan to agree to any talks before July, when discussions are scheduled on the wage guidelines for workers at the complex.

“We can’t agree to a retroactive raise when that time has already passed,” said Kim. “And because the wage hikes have been set within 5% since 2007, it also goes against the principles.”

“We’re going to wait until July to discuss it,” he added.

Seoul’s position appears to be that discussing a 10% hike at the July talks would also be out of the question, given the damages suffered by South Korean tenants companies from last year’s shutdown, which was initiated by North Korea.

Since 2007, North Korean workers at the complex have received 5% wage hikes following annual discussions in July, which have been reflected in their pay from August onward. At the moment, the roughly 52,000 North Korean workers at the complex receive 85.6 billion won, or around US$80 million, in total wages per year. The annual earnings for one worker amounts to 1.65 million won, or US$1,538, which works out to 137,000 won (US$128) per month. If South Korea agrees to North Korea’s demand, its companies would have to pay roughly 8.6 billion won (US$8 million) more per year.

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