Accessibility links

Breaking News

Koreas at Odds Over Wages at Joint Kaesong Complex

FILE - North Korean workers assemble jackets at a factory of a South Korean-owned company at the jointly run Kaesong Industrial Complex in Kaesong, North Korea, Dec. 19, 2013.

Tensions are rising between Seoul and Pyongyang over wage increases for North Korean workers employed by South Korean firms at the Kaesong Industrial Complex, an inter-Korean economic project.

Early this week, the North notified the South of its decision to raise the minimum monthly wage for its workers by 5.18 percent starting next month. With the plan, the minimum wage for the North Korean workers would be increased to $74 per month, up from $70.

The unilateral move came amid heightened tensions between the two Koreas over joint military drills by the United States and South Korea. Washington and Seoul will launch the annual drills next week.

The drills involve a computer-simulated exercise and a large field training, with around 3,700 U.S. troops and 200,000 South Korean soldiers. Earlier, the North proposed to suspend further nuclear tests in exchange for cancellation of the drills, an idea the U.S. immediately rejected.

South Korea’s Unification Ministry said Friday that the government would not accept the North Korean demand. The ministry proposed to hold talks between the two sides to resolve the issue. According to an inter-Korean agreement pertaining to the complex, wages should be determined through mutual agreement.

The South Korean companies in the complex also voice opposition to the North Korean move.

A wage increase "is something that needs to be discussed within the joint committee. Since North Korea unilaterally made the decision without taking proper steps, we cannot accept. It is a concern that if these things repeat themselves, it will be impossible to have a predictable managing environment,” Yoo Chang-keun, vice chairman of the South’s Kaesong Industrial Complex Business Association, said Friday in a phone interview with the VOA Korean service.

The Kaesong complex is just north of the demilitarized zone that divides the peninsula. The joint project between the Koreas allows South Korean companies to employ inexpensive workers who can speak Korean; North Korea, on the other hand, gains much-needed dollars. There are more than 53,000 North Korean workers employed by about 120 South Korean factories at the park.

Jee Abbey Lee contributed to this report.