[vol.26] Special1_ Urgent Measures Needed To Adjust Minimum Wages To A Realistic Level
WORKING WOMAN 2008. 1. 30. 16:30Urgent Measures Needed To Adjust Minimum Wages To
A Realistic Level
PARK, Jin-young Research Officer, KWWAU
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Last April, the Korea Women Worker's Association United (KWWAU) and the Korea Women's Trade Union (KWTU), undertook a month-long study on the working conditions of 528 contracted women workers in 107 workplaces in 10 different cities. The study revealed the serious conditions of low wages received by women workers and a debate was organized, urging for policy changes in the adjustment of the minimum wage to a realistic level. The present article is a summary of the study presented at the ‘Debate on the Reform Measures of the Minimum Wage Through the Eyes of Irregular Workers’on June 8, 2001. |
1. Introduction
In the labor market, women workers currently constitute as sideline, irregular workers. According to governmental statistics (as of April 2001), women workers form 68.1% of temporary, day-work. One of the most serious consequences due to the increase in irregular work, is the increase in poverty.
As a result, the KWWAU and the KWTU carried out a study on the wage and working conditions of irregular
workers. Among the irregular women
workers, the study emphasized the conditions of middle-aged women working in restaurants or contracted as janitors as these women form the majority who faced severe employment instability and low wages. The study revealed the seriousness of the wage conditions of these women. The minimum wage condition must be considered as a policy issue to be reformed within the existing legal system and brought to a realistic level.
2. The Working & Living Conditions of Contracted Women Workers
The study was undertaken in April 2001 for a month in eight regions and in ten cities by examiners who filled out questionnaires in face-to-face interviews with women workers. The study was undertaken with two directions in mind. First, the study on the working conditions in contract agencies was undertaken on women who had longer first-hand working experience in the relevant worksites. The study covered 117 case studies of working conditions in 101 employee (worksites) and 101 employer enterprises (contract agencies). Out of the interviewees, 40.2% worked in universities, 16.2% in governmental and public agencies, 14.5% in corporations and 11.1% in private hospitals.
Second, on the aspect regarding living conditions and reforms needed, the study on the living conditions of contracted workers in their respective contracted worksites was undertaken. The study included more worksites other than those mentioned above and totaled 528 women in 107 worksites and 107 contract agencies. Women workers in their 50s took up 42.1% and comprised the highest number. The next were in their 40s and 60s taking up 26.3% and 25.1% respectively. Research on educational levels showed that 12.3% had no education, 46.4% had received elementary education and 28.1% with middle-school education meaning that 86.7% had received education lower than middle-school levels. On the length of working years, the average was 34.3 months and average period of experience was 45.3 months showing clearly that even though these women were irregular workers with one-year contracts, the contracts were continuously renewed.
■ Wage and Living ConditionsThe study pointed out that the most serious problem faced by women workers was the problem of low wages. As such, this article was written with the purpose of concentrating on the problem of low wages and the working and living conditions of these women.
① The Problem of Low Wages Table 1. Wage Distribution No. of repliers % of replies Cumulative % less than 400,000 won 50 10.1 10.1 more than 400,000 won ∼ less than 500,000 won 288 58.4 68.6 more than 500,000 won ∼ less than 600,000 won 104 21.1 89.7 more than 600,000 won ∼ less than 700,000 won 31 6.3 95.9 more than 700,000 won ∼ less than 800,000 won 11 2.2 98.2 more than 800,000 won 9 1.8 100.0 Total 493 100.0 58.4% of the women replied that they receive more than 400,000 won but less than 500,000 won and 89.7% of the women replied that they receive less than 600,000 won. However, this does not mean that these women workers worked shorter hours. The shortest working time was 46 hours and 2 minutes (recess time and weekends non-inclusive).This is close to the legal working time of 44 hours but the wages received by these women were far too small. ② The Living Conditions of Women Workers ■ Reasons for Low Wages The reasons for the conditions of low wages can be summarized as below: ① Increasing of Irregular Work Table 2. Wage Comparisons between a full-time Worker and a contracted worker Full-time worker (A) Contracted (Irregular) age 57 years old 60 years old Education elementary school graduate no education experience 3 years 10 years Period of employment 3 years 18 months Type of work janitor janitor working hours per week 54 hours 52hours Total wages 1,239,062 won 460,000 won There is a wage difference of 779,062 won, the full-time worker receiving 2.7 times more than the irregular worker. Even if the intensity in the type of work carried out exists, there is no rationale for such difference in wages. ② The Solidification of Low Wages By the Minimum Wage System On the question whether there had been any wage increases in the past three years, 39.8% replied that there were wage increases, 26.9% replied that there were decreases and 31.5% replied that there were no changes at all. 1/3 of the interviewees replied that there were no wage changes with the passing years and one out of four women replied that wages were actually decreased. During our study, many women informed us that "it was 600,000 won three years ago but was unilaterally lowered during the IMF crisis to the present 400,000 won", "We receive 440,000 won at the moment. But our contracts are expiring and a new contract agency has been commissioned and has came around asking if we would agree to a cut of 30,000 won in wages." The main reason why these women face such low wage conditions lie in the fact that the minimum wage has been legally set at too unrealistically low standards. Contract agencies formulate the unit price of contract work in their tender bids following legal minimum wage standards. Since contract agencies are competing to lower the unit price of contract work, it is no surprise that the wages of contract agency workers remain the same and are on the verge of decreasing.
Table 3. Wages (Research based on individual workers) No.of repliers Ratio Cumulative Ratio less than 421,490 won 113 22.9% 22.9% more than 421,490 won ∼ less than 500,000 won 225 45.6% 68.6% more than 500,000 won ∼less than 600,000 won 104 21.1% 89.7% more than 600,000 won ∼ more than 700,000 won 31 6.3% 95.9% more than 700,000 won 20 4.1% 100.0% Total amount of wages 493 100.0% The conditions of low wages is reflected in the workplace as well. The average total amount of wage given out is 519,250 won and 85.3% of employers give out wages less than 600,000 won. 3. Conclusion - The Problems with the Existing Minimum Wage System and the Necessary Countermeasures The wages of most women are continuously decreasing through each renewals of their 1-year contracts with the contract agencies. Even if this is not the case, the wages of women workers are determined according to the legal minimum wage system. As such, what is most urgently needed at this stage, is the reform of the minimum wage system.
As stipulated in the preceding paragraph, the most serious problem faced by women workers was the problem of low wages. 89.7% of the interviewees replied that their wages were too small.
shows the distribution of wages as replied by the women workers.
The average number of family members of the women workers were revealed as 3.41 persons. 1/4 of these women were heads of their families or lived alone. 34.9% also replied that they were the sole breadwinners in the family. Accordingly, 1/3 of the women replied that they bore the burden of survival even though husbands or grown children exist.
As such, these women are not providing supplementary income but are the main upholders of the household. This can also be seen in the proportion of their income versus the income of an average household - 496,254 won versus 1,045,797 won - 50% of the income of an average household.
Most of the women workers replied that they were formerly full-time workers but were transferred to contract agency work and in the midst of such unstability employment, the working conditions of these women including wages and leave deteriorated. Former full-time workers when commissioned by contract agencies had became irregular workers.
49.4% replied that they were full-time workers before their present form of employment, 28.0% replied that they were employed as irregular/contract agency workers from the beginning while 22.0% replied that they had no clue as to their mode of employment. This also means that 50% of the contract agencies are sending workers to their former full-time workplaces. That is to say that these workers employed by the contract agencies were formerly full-time workers of the workplace where they are presently working at.
On the question `if the change in the workplace meant the change in employers,’ 76.4% replied that the workplace was the same and only the employer has changed. This is a typical example of the mode of employment in practice. Workers stay in one workplace but the employer has changed hands. As such, workers stay continuously in the same workplace but under different employers.
The comparison in wages received by these irregular workers versus the wages received by full-time workers in the same workplace shows clearly the seriousness in the wage conditions of these workers.
shows the comparisons in age, working experience, period of employment, working hours and wage between two women janitors working in S University in Seoul.
Worker (B)
These irregular workers cannot expect any wage increases coming from the length of working experience or the length of employment in the same workplace. Their wages are only based on the contract signed when they first started work. Their wages remained the same or at times even decreased in value.
According to a women worker who responded to the questionnaires,“it is 420,000 won for a worker with 10-year working experience and 420,000 won for a worker with 1-year working experience. How can this be possible?” The contracted janitors in the above S University all received the same 460,000 won irrespective of their length of employment in the same workplace. shows the situation of wages based on the minimum wage system. Taking into consideration the total amount of wages received versus the legal minimum wage of 421,490 won, it was found that 22.9% of the interviewees received less than the legal minimum wage. About half of the interviewees received wages just exceeding the legal minimum wage standards but receiving less than 500,000 won and this clearly stipulates that the legal minimum wage standards were used as the basis for formulating the wages of these workers.
14.7% of employers give out wages less than legal minimum wage of 421,490 won (44 hours weekly, 226 hours monthly). There were actually 4 cases where the basic wage was set at 421,490 won. The dismal legal minimum wage standards are hindering the wage increases of women workers. Unless the legal minimum wage increases, the wages of women workers would remain the same.
Despite such dismal minimum wage standards, women workers have not taken any collective action. Voicing their collective rights is impossible for these women workers because of their status as irregular workers and because whatever mode of employment they have relates to the renewal of contracts with the agencies. Such status causes workers to remain silent when the unit price of contract work is lowered and wages reduced in the next tender bid. The ugly cycle of wage decreases keeps on continuing.
Strong measures are needed to stop the cycle of wage decreases as the tender price of contract agencies continues to fall. It must also be pointed out that the minimum wage system is not properly observed and government supervision on such matters remain slack.
The biggest problem with the minimum wage system is the dismal amount of wages stipulated. This standard can only be applied to 2 persons out of a hundred people. This standard is lower than the daily wage given out in public or self-help works.
This means that it is more difficult to attract workers to the labor market based on such petty wages. If the present condition of wages continues, it cannot be expected that the spirit of self-reliance of the poor would persist and this would lower the desire for work, thus, preventing the purpose of social unity, central to the function of social welfare.
As seen in our study, the minimum wage system has been taken as the basis for solidifying the practice of giving out low wages to the workers instead of protecting them and as such, the standards of wages must be raised to realistic levels. Only then could the minimum wage system be put into effective use. The reform of the minimum wage system is urgently needed at this point as the women workers, as revealed in our study, were working longer hours than the legal working hours and not receiving sufficient pay to lead decent lives.
The amount of minimum wage has been formulated on unrealistic grounds. The amount has been formulated based on the living expenses of workers, the standards of wages of workers in similar areas of work and labor productivity (the Minimum wage Commission, 2001). The most controversial aspect is the formulation of the living expenses of workers which was based on the living expenses of a single family of a 18 year old worker. Questions have been raised continuously on the issue and proposals have been put forward for the formulation of the minimum wage based on the living expenses of a worker less than 29 years of age.
From the women workers' perspective, it is unrealistic to see how the amount of minimum wage has been formulated. Economic participation is highest among 40-year old women - 63.1% in their early 40s and 62.8% in the late 40s. As seen from our research, women over 40 years of age cannot be considered as single workers.
Middle-aged and older women who make up the workforce in low paying jobs are in most cases the heads of their families. 1/3 of the women in our research were the sole breadwinners in their families. If the formulation of the minimum wage cannot be based on the standards required by these women, then the basis for formulation should be made more realistic than the one mentioned above. Another point to be considered is the increase in responsibilities of the workplace employer. A system should be set up to hold workplace employers and contract agencies accountable for any violations in the legal minimum wage standards as the wages of workers are decreasing below the standards required by law due to over-competitive tender bids which lower the unit price of labor of contract workers, ipso facto, lower wages. And unless such a system is set up the practices of illegal wage standards would continue.
Other measures would be the strengthening of administrative supervision allowing irregular workers to participate and supervise in the inquiry commissions and to reform the exceptions in the application of the minimum wage standards on short-term contract workers, Workers working less than 6 months and are 18 years of age, the disabled, apprentices, and occupational trainees.