April 18, 2024

• 

[THE INVESTOR] Hyundai Motor Group joined hands with the government on Jan. 24 to support small and medium enterprises  in the face of the recent minimum wage hike, the Ministry of SMEs and Startups said.

The group signed a memorandum of understanding with the ministry to contribute 50 billion won (US$46.40 million) for its subcontractors hit by the minimum wage increase, the ministry said.

The government raised the minimum hourly wage by 16.4 percent, to 7,530 won, effective Jan. 1 this year, marking the biggest jump in about two decades. The Moon Jae-in administration has pledged to raise the minimum wage to 10,000 won before Moon‘’ single five-year term ends in 2022.

Although the minimum wage hike is one of the government’s strategies to boost private consumption and narrow the income gap, small and medium enterprises have expressed concerns about higher labor costs.

“Cooperation between large and small firms is the only way to break through the current low growth and wealth polarization faced by the Korean economy,” said Hong Jong-haak, minister of SMEs and startups

Hyundai Motor Group also plans to utilize 100 billion won worth of low-interest loans for its subcontractors, according to the ministry.

By Song Seung-hyun and newswires (ssh@heraldcorp.com)