[Report] "It's Time to Raise It" vs "Small Business Owners Are Struggling" Citizens Debate 'Minimum Wage 10,000 Won'

Start of Final Minimum Wage Deliberation under Moon Government
Previously Promised 'Minimum Wage 10,000 Won' but Low Increase Rate for 2 Years
Clear Labor-Management Differences... Citizens Also in Heated Debate

On the afternoon of the 18th, citizens are strolling through the alleyways of Myeongdong Street in Seoul. Photo by Choyoung Kim choyoung@asiae.co.kr

[Asia Economy Reporters Lim Juhyung and Kim Choyoung] "It's tough because of COVID-19, but let's all endure together." , "The minimum wage can be raised a bit."

Discussions to decide the final minimum wage under the Moon Jae-in administration have begun. The labor sector is strongly demanding that President Moon keep his campaign promise of a "10,000 won minimum wage."

Public opinion is sharply divided. On one hand, there are calls for a significant increase in the minimum wage since the rate of increase was low due to COVID-19. On the other hand, there are counterarguments that workers need to make concessions given the hardships faced by self-employed business owners.

The Minimum Wage Commission started full discussions with its first plenary meeting on the 20th of last month. The commission plans to finalize and announce next year's minimum wage by August after deliberations and resolutions.

Under the current administration, the minimum wage increase rates (based on the applicable year) were 16.4% in 2018, 10.9% in 2019, 2.9% in 2020, and 1.5% this year, marking the lowest levels in history. The amount stands at 8,720 won, falling short of 10,000 won.

Previously, President Moon promised a "10,000 won minimum wage by 2020" as part of his 19th presidential election pledge, but the rapid economic downturn caused by the spread of COVID-19 last year led to a slowdown in minimum wage increases.

On the 18th, the 2nd plenary meeting and appointment certificate ceremony held in the Minimum Wage Commission meeting room at the Government Complex Sejong in Sejong City. / Photo by Yonhap News

In this situation, public opinion on whether to raise the minimum wage next year is divided. Some argue that since workers made concessions during the economic hardship caused by COVID-19, wages should be raised significantly. Others express concerns that a sharp increase in the minimum wage could harm self-employed business owners.

A staff member in their 30s, A, whom we met at a store in the Myeongdong shopping district in Seoul, said, "Of course, the minimum wage should be raised. Even if it’s not 10,000 won, it should be increased to an amount close to that." They raised their voice, saying, "We have effectively postponed increases for two years because of COVID-19, so how long are we supposed to endure?"

They added, "People say that if the minimum wage goes up, employers will reduce staff, but when there is a real need for labor, employers inevitably look for workers," emphasizing, "I’m not worried about the minimum wage increase."

B, an office worker who earned living expenses through part-time jobs for several years during school, said, "Day laborers and irregular workers benefit from the minimum wage. Raising the minimum wage is essential to protect the most vulnerable groups in our society." They argued, "If wages increase, workers’ motivation will rise, which will be beneficial for employers in the long run. There is no reason to oppose it."

Morning scene of Myeongdong Street in Seoul on the 18th. / Photo by Choyoung Kim choyoung@

On the other hand, some believe that raising wages during the difficult times of COVID-19 is unfair from the employer’s perspective.

C, in their 50s and running a self-employed business, said, "You need to have earnings to share, but in these tough times due to COVID-19, it’s hard to accept workers only asserting their rights." They added, "I think we need to understand each other’s situations and demand the minimum wage within a reasonable range."

They continued, "From a business owner’s point of view, raising the minimum wage suddenly is unfair," expressing, "Society requires harmony and cooperation among its members, but it seems like the demands are one-sided from the workers’ side."

Concerns were also raised that a sharp increase in the minimum wage could lead to job losses. D, who works part-time at a convenience store, said, "I had no income for a while because of COVID-19, and I barely found a part-time job." They expressed worry, "I’m just grateful to have a job now, but if the minimum wage suddenly rises and jobs decrease, I’m scared."

Meanwhile, the labor sector is taking a hardline stance, even refusing to participate in negotiations. The Korean Confederation of Trade Unions (KCTU), which holds four of the minimum wage worker committee seats, announced on the 18th that it would not attend the second plenary meeting of the Minimum Wage Commission. The KCTU also held a rally outside the meeting venue demanding a significant increase in the minimum wage.

The government urged the Minimum Wage Commission members to make reasonable decisions. At the 12th Minimum Wage Commission member appointment ceremony, Employment and Labor Minister Ahn Kyung-duk said, "It is a reality that deliberations on the minimum wage are not easy because public opinions on the minimum wage level vary," but emphasized, "I hope you will strive to decide a reasonable minimum wage that protects low-wage workers and is acceptable to the industrial field."