01/16/2019

South Korea Raised Taxes in Bid for Growth. So Far, It’s Not Working.

As President Trump leads a drive to slash taxes and pare back regulation, one major economy is taking a different approach.

Under President Moon Jae-in, South Korea has raised taxes and the minimum wage in the name of economic growth. So far, it hasn’t worked out as planned.

Growth has slowed, unemployment has risen and small-business owners like Moon Seung are complaining. Mr. Moon, founder of an auto parts maker called Dasung in Incheon, an industrial town near Seoul, says his labor costs were up an extra 3 percent last year after the minimum wage rose to 7,530 Korean won, or about $6.70, an hour. That may not sound like much, but it ate into his razor-thin profit margin and prompted him to stop hiring.

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