Labor Minister Considers 'Fairness Allowance' to Narrow Wage Gaps

South Korea's Minister of Employment and Labor, Kim Young-hoon, has announced that the ministry is exploring the introduction of a 'fairness allowance,' a concept aimed at mitigating wage disparities, particularly for workers facing employment instability. Minister Kim stated on KBS's 'Sunday Diagnosis Live' that when employment is precarious and wages are low, the gap between workers widens. He indicated that discussions with relevant ministries are underway for this proposed allowance, which would offer increased bonuses to those with shorter employment durations. This initiative echoes a similar policy implemented by Lee Jae-myung during his tenure as Gyeonggi Province Governor, where a 'fairness allowance' of 5-10% of the living wage was provided to temporary workers in provincial institutions, with amounts varying based on tenure. Minister Kim expressed confidence that the direction for this policy is clear and specific figures are being prepared for an announcement soon. Beyond the fairness allowance, Minister Kim also addressed the controversial 'Yellow Envelope Law,' which concerns labor union rights and collective bargaining. He clarified the government's stance on the employer's role, stating that it is difficult to view the President as a 'management responsible person' under the law, despite some labor groups advocating for such a definition. This clarification follows remarks by Prime Minister Han Duck-soo, who suggested that legal revisions might be necessary regarding the scope of government responsibility. The minister also touched upon the contentious issue of raising the retirement age, emphasizing the urgency of resolving the matter within the first half of the year. He acknowledged the differing preferences between businesses, who favor re-employment over extending the legal retirement age, and labor unions, who advocate for the latter, and pledged to find a practical solution that balances these interests.

“

When employment is precarious and wages are low, the gap widens.