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(LEAD) Koreas agree on 5-pct hike in minimum wage for Kaesong workers

2015/08/18 10:25

(ATTN: UPDATES with more info in paras 6-11; ADDS photo)

SEOUL, Aug. 18 (Yonhap) -- South and North Korea have agreed to hike the minimum wage by 5 percent for North Korean workers at a joint industrial park in the North, industry sources said Tuesday, a move which will help end a months-long wage row.

The two Koreas have been embroiled in a wage dispute following North Korea's unilateral decision to hike the wage by 5.18 percent for about 55,000 North Korean workers at Kaesong Industrial Complex in the North's border city of the same name.

A total of 124 South Korean small businesses are running factories at the complex.

In what could be a relief to the wage row, the quasi-state committees from the two Koreas agreed Monday to raise the minimum wage by 5 percent, the same level at which the wage has been set every year, according to industry sources.

They said that the two Koreas plan to hold a meeting of a joint committee in charge of running the complex to discuss how to revise labor guidelines.

This file photo, taken on July 24, 2015, shows the Kaesong Industrial Complex, located in North Korea's border city of the same name. (Yonhap) This file photo, taken on July 24, 2015, shows the Kaesong Industrial Complex, located in North Korea's border city of the same name. (Yonhap)

The agreement is expected to raise the total monthly wage by up to some 10 percent when taking into account other compensation, the sources said.

The move came even as military tension has heightened on the divided peninsula following a land mine explosion blamed on the North in the heavily fortified demilitarized zone. The North has denied any role in the blasts, rejecting Seoul's call for apologizing for the incident that seriously wounded two South Korean soldiers.

The joint factory park, opened in 2004, is the last remaining symbol of inter-Korean reconciliation. It has served as a major revenue source for the cash-strapped North, while South Korea has utilized cheap but skilled North Korean laborers.

Seoul has rejected Pyongyang's unilateral move to hike the wage, saying that it is in breach of a 2004 agreement that calls for the two sides to set wages through consultations.

In July, the two sides held talks of the joint committee for the complex operation, the first since June last year, but they failed to reach an agreement.

The operation of the complex has been highly swayed by the level of tension on the peninsula. In April 2013, the North unilaterally shut down the park for about four months.

sooyeon@yna.co.kr

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