Factories within the Kaesong Industrial Complex (image via Wikipedia)
It’s probably not all that usual for a business ethics blogger to argue against a significant wage increase for full time workers in poor countries whose monthly salary is a paltry seventy five American dollars per month.
But when the majority of the increase (which would take the monthly wage to $300) would flow not to the worker but to one of the most repressive governments on earth, this is certainly one increase which I would could certainly not support at all.
About the increase
The increase relates to workers at the Kaesong Industrial Complex (shown above), an industrial park in North Korea located approximately six kilometers north of the border between North Korea and South Korea. The park represents a specially designated area whereby South Korean companies are allowed to operate within North Korean territory, utilizing the plentiful supply of low-cost labor from the North.
On a tour a few weeks ago to the DMZ, a heavily fortified and controlled area representing the border between South Korea and North Korea, our tour guide was telling us that North Korean workers employed at the park currently earn the equivalent of USD$75 per month.
However, in a somewhat extreme measure, the North Korean government is now demanding a four hundred per cent increase in this amount, to take the monthly wage up to $300.
Problem is, it’s all going to government coffers
Under normal circumstances, I would fully support wage increases for those who are poorly paid.
Those workers who perform an honest day’s work should be entitled to receive a fair and equitable level of financial reward for their effort. I have absolutely no idea what would be considered a good level of income by North Korean standards, but even if the workers got to keep the majority of their earnings, I could not imagine that earnings of $75 per month would represent a fair level of compensation compared to the value of the services which the workers provide.
Just one problem – little, or any of the increase will actually go to the workers.
Of the seventy-five American dollars per month that workers at the complex earn now, our tour guide informed us that the North Korean government takes seventy dollars, leaving just five dollars – yes, that’s right, just five American dollars per month, to be kept by the worker.
The workers keep only a tiny portion of what they earn now and it is highly unlikely that they will keep much of the benefit from any ‘wage increase.’
Instead, the vast majority of this increase, if it does indeed occur, will flow through to the coffers of the North Korean government – helping to finance a regime which appears to be hell-bent on the development of weapons of mass destruction and whose human rights record is not a great deal better than Sudan, Zimbabwe or Myanmar.
This cannot be supported under any circumstances. Wage rises which flow through into genuine benefits for workers and their families in poor countries can easily be supported on social grounds. But not ‘wage rises’ which merely mean more money for bomb making oppressive governments, and I certainly hope that the North does not receive its demands in this regard.
(Refer article for further information on this topic)
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