KCCI "Strong Regret Over Government's Rejection of Minimum Wage Objection"

[Asia Economy Reporter Changhwan Lee] The Korea Employers Federation (KEF) expressed strong regret over the government's refusal to accept objections raised by the business community regarding the 2022 minimum wage proposal.

On the 4th, KEF issued a statement saying, "The Ministry of Employment and Labor did not accept the objections raised by KEF and other economic organizations concerning the 2022 minimum wage proposal and finalized the hourly wage at 9,160 won," adding, "In a situation where small and micro enterprises and small business owners are facing extreme difficulties due to the resurgence of COVID-19, the business community strongly regrets the Ministry of Employment and Labor's decision to ignore the desperate appeals from the field more than ever."

The business community has argued that the 5.1% increase in next year's minimum wage decided by the Minimum Wage Commission is at a level that small and micro enterprises and small business owners, already at their limits, cannot possibly bear. They also expressed concerns about the enormous negative ripple effects on the national economy, such as job losses among vulnerable groups and price increases caused by the increased labor cost burden.

In the statement, KEF emphasized, "Objections to the minimum wage proposal are a clear right guaranteed by the Minimum Wage Act, and the government has an obligation to conduct sufficient review and take appropriate measures. However, the current objection system is merely a formal procedure to express protest without effectiveness, and this year again failed to break away from past inertia."

They argued that the government must prepare measures to prevent side effects caused by the minimum wage increase.

KEF added, "The government must urgently devise ways to reduce the economic and social side effects caused by the minimum wage increase, even if only slightly," and "The current minimum wage decision system, which fuels futile disputes between labor and management, should be reformed so that the government takes direct responsibility for decisions. Active institutional improvements should be promoted to ensure rational operation and increased acceptance of the minimum wage."