Last November, North Korea unilaterally announced an increase in workers’ wages paid by South Korean businesses at the jointly run Kaesong Industrial Complex, just north of the demilitarized zone. Pyongyang then told the companies in February that they intended to raise the monthly minimum wage of North Korean workers in the zone by 5 percent, to a total of US$74. Since then, the 124 South Korean small and medium sized companies in Kaesong have been negotiating with the North about its unilateral move.
North Korea claimed that the wages, which including overtime pay, taxes, bonuses and incentives currently amount between $130 and $300, should rise to reflect rising consumer prices. But the South Korean government is not agreeing to any of this, and is standing on the principle that Seoul and its employers need a voice in the decision. But South Korean employers, fearful of problems with production in Kaesong including penalties for delaying wage payments or more severe repercussions, are starting to break ranks, and three companies just paid the increased amount.
So, is this a victory for North Korean workers assisted by their government, which is led by the Workers Party of Korea but remains one of the few governments that never joined the International Labor Organization (ILO)? It’s not so clear, because the North Korean workers don’t actually receive the salaries themselves.
Although the Kaesong Industrial Complex’s law directs the South Korean companies to pay the salaries in cash directly to the workers, North Korea requires workers’ salaries to be given to the government for distribution to the workers. Not surprisingly, the result is the workers only get a small fraction of what they’ve earned. These opaque and unaccountable arrangements make it unclear whether the workers will benefit from the raise in their salaries, or whether Kaesong’s political commissars will just pocket the increase.
The South Korean media has been speculating beyond the issues of wages to ask whether this action creates a renewed priority on North Korea’s unilateral decision making. Most commentators seem less than interested in the plight of the North Korean workers, who face certain retaliation if they stand up against Pyongyang’s abuses, or in the difficulties faced by the South Korean investors who increasingly have little say in issues of the management of the Kaesong Industrial Complex.
The Kaesong Industrial Complex opened in June 2004 and has become an important window for the outside world to peer into a sliver of North Korea. North Koreans from remote, rural provinces learn about the outside world through Kaesong. But that’s not enough to make up for the violation of workers’ basic human rights to receive their pay, to have their say, and to organize their own, independent unions.
The Kaesong law governing working conditions in the complex falls well short of international standards, especially with regard to the workers’ right to organize without hindrance, elect their own representatives, form independent labor unions and bargain collectively. Also forgotten in the rush to raise wages was North Korea’s failure to protect women workers from sex discrimination and sexual harassment, and to keep children away from hazardous labor.
Instead of arguing about the increase in salary, the South Korean government should be demanding that North Korea stop playing middleman and ensure that the workers in Kaesong receive all of their salary directly, not just the slivers of their pay that Pyongyang agrees to share with them.