S. Korea's minimum wage hike improves productivity in manufacturing sector: BOK
- 5 years ago
South Korea's central bank has revealed that the effect of the rise in the minimum wage varies depending on the sector or size of businesses.
The Bank of Korea added the hike in the minimum wage has helped to improve productivity at manufacturing firms.
Ko Roon-hee explains.
According to the Bank of Korea's report released on Friday, the impact of the rise in the minimum wage varies by sector and the number of workers a business employs.
The analysis written by BOK researcher Ryuk Seung-whan, is based on data from Statistics Korea,... including a survey on the economically active population and an employment survey covering different regions taken between 2011 and 2016.
The study calculates "the influence rate of the minimum wage", which measures the ratio of workers affected by the minimum wage hike to the total number of workers in an industry.
And the rate varied, depending on sector and the sizes of companies.
For instance, the rate was high in industries related to food and clothing...meaning there's a high share of people affected by the minimum wage rise in those sectors.
In contrast, the rate was low in people for working at oil refineries.
The rate was also higher at small firms compared to their larger counterparts.
It also found out how the rise in the minimum wage affected the qualitative aspects of the economy, such as workers' productivity.
The manufacturing industry saw its productivity improve over the cited period, as higher salaries encouraged employees to work harder.
By sector, workers in the auto and textile goods sectors experienced a more positive effect in productivity...compared to the electronics sector.
By size, bigger firms experienced clear improvements in productivity... compared to smaller firms.
The report added such positive effects have the possibility to offset the negative effects coming from the sharp increase in labor costs.
Ko Roon-hee, Arirang News.
The Bank of Korea added the hike in the minimum wage has helped to improve productivity at manufacturing firms.
Ko Roon-hee explains.
According to the Bank of Korea's report released on Friday, the impact of the rise in the minimum wage varies by sector and the number of workers a business employs.
The analysis written by BOK researcher Ryuk Seung-whan, is based on data from Statistics Korea,... including a survey on the economically active population and an employment survey covering different regions taken between 2011 and 2016.
The study calculates "the influence rate of the minimum wage", which measures the ratio of workers affected by the minimum wage hike to the total number of workers in an industry.
And the rate varied, depending on sector and the sizes of companies.
For instance, the rate was high in industries related to food and clothing...meaning there's a high share of people affected by the minimum wage rise in those sectors.
In contrast, the rate was low in people for working at oil refineries.
The rate was also higher at small firms compared to their larger counterparts.
It also found out how the rise in the minimum wage affected the qualitative aspects of the economy, such as workers' productivity.
The manufacturing industry saw its productivity improve over the cited period, as higher salaries encouraged employees to work harder.
By sector, workers in the auto and textile goods sectors experienced a more positive effect in productivity...compared to the electronics sector.
By size, bigger firms experienced clear improvements in productivity... compared to smaller firms.
The report added such positive effects have the possibility to offset the negative effects coming from the sharp increase in labor costs.
Ko Roon-hee, Arirang News.