SEOUL (Reuters) - South Korea plans to directly fund small businesses so that they can keep on their workers when the minimum wage is raised by 16 percent next year, the finance minister said on Thursday.
“We plan to provide about 3 trillion won ($2.70 billion) to stabilize the job market, although the plan needs to be approved by the budget committee (at the parliament),” Finance Minister Kim Dong-yeon said.
He was speaking at a policy meeting called to discuss worries of looming mass job losses expected to follow the 2018 minimum wage hikes.
South Korea plans to raise its minimum wage 16 percent next year - the biggest jump in nearly two decades - as President Moon Jae-in looks to spur domestic spending and generate more balanced growth in Asia’s fourth-largest economy.
The increase to 7,530 won ($6.76) per hour will affect nearly one in four South Korean workers, according to the Minimum Wage Commision.
Reporting by Cynthia Kim and Christine Kim; Editing by Eric Meijer