One Day Before the Legal Deadline for Minimum Wage... Tense Tug-of-War Between Labor and Management

On the afternoon of the 21st, at the 5th plenary meeting held in the Minimum Wage Commission meeting room at the Government Complex Sejong in Sejong City, Ryu Ki-jung, Executive Director of the Korea Employers Federation (left), a user committee member, and Lee Dong-ho, Secretary General of the Korean Confederation of Trade Unions, a labor committee member, are seated and conversing.
[Photo by Yonhap News]

On the 28th, labor and management continued a tense tug-of-war over next year's minimum wage decision. Both sides failed to narrow their differences even a day before the legal deliberation deadline.

The Minimum Wage Commission (MWC) held its 7th plenary meeting in the afternoon at the Government Sejong Complex to deliberate on the minimum wage level. Earlier, the labor side proposed a minimum wage of 10,890 won for next year, an 18.9% increase from this year, while management requested a freeze at 9,160 won.

Lee Dong-ho, Secretary General of the Federation of Korean Trade Unions (FKTU) and a worker representative, criticized the management representatives for submitting a freeze proposal, saying, "In this period of high inflation, the freeze proposal by management representatives that does not even reflect the minimum inflation is a disregard for low-wage workers."

He emphasized, "Learning from the COVID-19 crisis, raising the minimum wage is essential to reveal the fundamental problems of our economy, resolve inequality and polarization, and move toward the future. In this era of 'three highs'?high inflation, high interest rates, and high exchange rates?raising household income to boost consumption, thereby expanding corporate investment and production to revive the economy, is the path to a win-win economy."

Another worker representative, Park Hee-eun, Vice Chair of the Korean Confederation of Trade Unions (KCTU), said, "Prices are rising daily and the suffering of low-wage workers is intensifying, so I cannot help but be angry at management for insisting on a freeze citing 'payment ability' without legal grounds."

She added, "We have just barely submitted our demands and started discussions, yet I strongly protest the public interest commissioners who try to end the deliberations hastily by citing the legal deadline. While adhering to deadlines is necessary, forcing the submission of revised proposals is nothing but a threat to conclude the deliberations hastily."

On the other hand, management argued that the minimum wage should be frozen considering soaring producer prices. Ryu Ki-jung, Executive Director of the Korea Employers Federation (KEF) and a management representative, said, "The minimum wage increase rate over the past five years has been more than four times the inflation rate. In particular, last month's producer price inflation was 9.7%, significantly higher than the consumer price inflation of 5.4%. The burden from recent price increases is felt more acutely by self-employed individuals and others."

He continued, "Stabilizing the livelihood of low-income workers cannot be achieved by the minimum wage alone. Rather, it is necessary to link welfare policies such as the Earned Income Tax Credit to motivate workers and alleviate the management burden on small and medium-sized enterprises and small business owners."