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North Korea cuts wages of citizens on Chinese payroll by raising government’s cut

On July 10, 2018, in Pyongyang, North Korea, Kim Jong Un, leader of the Democratic People's Republic of Korea, inspects a construction site at Samjiyon County in the Mount Paektu region. (Kcna/Xinhua/Zuma Press/TNS)
February 05, 2019

This article was originally published by Radio Free Europe/Radio Liberty and is reprinted with permission.

North Koreans who work for Chinese companies are now receiving less in pay, as the Kim Jong Un regime is taking a larger percentage of their paychecks.

Whether working in China or in Chinese-run factories within North Korea, they can expect relatively higher wages than their countrymen, but the regime also takes a cut to fill its coffers with foreign currency.

A Chinese businessman who operates a marine product processing plant in Rason, North Korea told RFA’s Korean Service, “wages [at these types of plants] usually vary depending on industry, but companies can expect to pay about 400–500 yuan [$60 – $75] per month to the North Korean regime for each worker.”

“That’s about half the wage that used to be paid by the South Korean companies at the Kaesong Industrial Complex,” the businessman said.

The complex in Kaesong was set up in 2002, allowing South Korean companies to tap into cheaper North Korean labor, while providing foreign currency to the North Korean government. It was closed in February 2016 as a dispute over North Korea’s nuclear weapons programs intensified and Pyongyang ordered all South Koreans out of the complex and seized South Korean assets there.

“The way it works is that the Chinese company distributes the wages to the North Korean government, then the government redistributes it to the workers,” the businessman said, describing arrangements at his plant and others like it in Rason.

“The North Korean authorities used to pay 40-50 yuan [$6-$7.50] to each worker per month, but they’ve drastically cut wages to 9 yuan [$1.34] to each male worker and 8 yuan [$1.19] to each female worker,” said the businessman.

“The authorities have been trying to justify this massive pay cut to about 20 percent of their previous pay by saying it’s an effort to be fair to workers in North Korean-run plants,” he said.

“But that’s just a pathetic excuse to further exploit workers at these plants,” the businessman said.

Another source living in China’s Liaoning province said “Wages for North Koreans dispatched here to China are usually about 2,000 – 2,500 yuan [$300 – $370] but the workers would only see about 400 to 500 [$60 – $75] at most.”

“But since late last year, they’ve only been getting about 100 yuan [$15],” the source said.

“They tell the workers that they’re trying to be fair to those working within North Korea, but that excuse is a gimmick designed to address the imminent foreign currency shortage,” the source said.

“Some of the female workers that have been dispatched to North Korean restaurants here have not been paid for a long time,” said the source, adding, “The excuse they are given is that they’re here for a practical training session.”

“It’s not at all surprising that the North Korean regime has senselessly cut wages this significantly,” the source said.

North Korea is under a package of United Nations and unilateral sanctions by member countries that curb its ability to trade with the outside world and are designed to cut access to hard currency the Kim regime uses to fund weapons programs.