South Korean firms operating in the Gaeseong Industrial Complex have decided to raise the minimum wage for North Korean workers by five percent, as demanded by North Korea's Central Guidance Bureau for Special Zone Development.

An association of the South Korean companies at the industrial park in the North Korean border city of Gaeseong made the decision in a meeting of its board of directors.

The association said that it decided to raise the monthly minimum wages for North Korean workers despite business difficulties such as dropped orders, which have resulted from strained inter-Korean relations in the wake of the sinking of the Cheonan naval vessel.

As a result, the Gaeseong Industrial Complex Management Committee will soon hold wage negotiations with the North Korean bureau.

If an increased level is finalized, the minimum wage for North Korean workers will jump three U.S. dollars from the existing 57 dollars a month to 60 dollars a month.

The wage hike will go into effect on August first and will be applied for one year.