Next Year's Minimum Wage Set at '9,620 Won'... 5% Increase Amid KCTU and Business Sector Walkout (Comprehensive)

KCTU Proceeds with Vote Amid Employers' Walkout
Weekly Holiday Allowance Included, Monthly Salary 2,010,580 KRW
Legal Deadline Met for First Time in 8 Years Since 2014

On the morning of the 30th, at the 8th plenary meeting held in the Minimum Wage Commission meeting room at the Government Complex Sejong in Sejong City, Chairman Park Junsik (right) and worker representative Lee Dongho, Secretary General of the Korean Confederation of Trade Unions, are greeting each other.
[Photo by Yonhap News]

The minimum wage for next year has been finalized at 9,620 won per hour, a 5.0% increase from this year.

Although the minimum wage was decided within the legal deadline for the first time in eight years since 2014, controversy is expected to continue as some labor representatives and all employer representatives walked out during the vote.

The Minimum Wage Commission (MWC) held its 8th plenary meeting at the Government Complex Sejong on the 29th and approved the minimum wage for next year at 9,620 won.

This amount is 460 won (5.0%) higher than this year's minimum wage of 9,160 won. When converted to a monthly salary including weekly holiday pay, it amounts to 2,010,580 won (based on 209 working hours per month).

The minimum wage for next year was decided by voting on a single proposal presented by the public interest commissioners. The public interest commissioners calculated the 5.0% increase rate by adding the economic growth rate of 2.7% and the inflation rate of 4.5%, then subtracting the employment growth rate of 2.2%.

The labor and management sides again failed to reach an agreement on the minimum wage level.

The labor representatives initially demanded 10,890 won per hour on the 23rd, then revised it to 10,340 won in the first amendment, and 10,090 won in the second amendment.

The employer representatives initially requested to freeze the wage at this year's level, then proposed 9,260 won in the first amendment and 9,310 won in the second amendment.

During the meeting, the labor representatives submitted a third amendment of 10,080 won, while the employer representatives proposed 9,330 won.

As neither side could narrow the gap further, the public interest commissioners suggested a 'deliberation promotion range' of 9,410 won to 9,860 won per hour.

Despite this, when both sides refused to submit additional amendments, the public interest commissioners presented a single proposal of 9,620 won.

Regarding this single proposal, four labor representatives affiliated with the Korean Confederation of Trade Unions (KCTU) and all nine employer representatives refused to vote and left the meeting room.

The MWC consists of 27 members: nine labor representatives, nine employer representatives, and nine public interest commissioners. Due to significant differences between labor and management, the public interest commissioners usually hold the 'casting vote.'

All nine employer representatives left immediately after the vote was announced, so they were counted in the quorum and treated as abstentions.

Park Hee-eun, Vice Chairperson of the KCTU, said right after leaving, "The proposal presented by the public interest commissioners is effectively below the inflation rate. Ultimately, this means wages are not increasing but rather real wages are being cut beyond a freeze."

Ryu Ki-jung, Executive Director of the Korea Employers Federation and an employer representative, said, "Small and medium-sized enterprises and small business owners have reached their limits, so we have significant dissatisfaction with whether a 5% increase can be accepted. Therefore, we did not participate in the final vote and left."

With the final decision on the minimum wage for next year on the 29th, the legal deadline was met. This is the first time in eight years that the MWC has met the legal deadline, and the ninth time since the minimum wage system was introduced in 1988.

The MWC will submit the approved minimum wage proposal for next year to the Ministry of Employment and Labor. The ministry must announce the minimum wage for next year by August 5. Once announced, it will take effect from January 1 of the following year.

Both labor and management can raise objections before the minimum wage is announced, and if the ministry deems the objections valid, it can request a re-deliberation from the MWC. However, there has never been a re-deliberation so far.