The government will impose sanctions on companies that comply with North Korea's wage increase demand for workers in the Kaesong industrial complex.
An official with the Ministry of Unification said on March 10 in a forum with reporters, "We will soon send out an official correspondence to companies doing business in Kaesong not to conform to the wage hike demand recently made by the North Korean government and the south will impose administrative sanctions to those firms not complying with it."
Earlier on February 24, the North Korean government sent a notification that it would raise the minimum monthly wage to US$74 from $70.35 effective on April 10 (wages for March), with corresponding social insurance premiums by 15 percent."
The ministry official added, "Our ministry will review detailed sanctions such as restriction on company officials in visiting the north or cuts in financial support. In whatever way we will try to make sure no firm to follow the north's unconsulted wage hike attempt."
Leaders of the association for South Korean firms in the Kaesong industrial complex said on March 5 in a meeting with ministry officials that it is advisable for the government to send out official documents to the firms in Kaesong in order not to cause confusion.
To this, officials of some companies in Kaesong complained that they will have to incur losses from refusal to work overtime by North Korean workers or, in the worst-case scenario, total withdrawal of workers from the complex. President of a company with an operating in the special industrial zone said, "I am sure there will be defecting firms. Unless the south government shows stern attitude not to bow to the demand of North Korea, we will have to keep being dragged by irrational demands of the north."
Source: Korea Economic Daily
