Business Sector's Differential Demands for 'Restaurants, Taxis, Convenience Stores'
Initial Proposed Increase Rates Not Even Presented
The legal deadline for processing next year's minimum wage has been missed. This is because the business and labor sectors have different intentions and have failed to narrow their differences over issues such as surpassing the 10,000 won minimum wage and differential application by industry. On the 27th, the legal deadline for minimum wage deliberations arrived, but no initial proposal for the increase rate was presented, and only a power struggle between labor and management continued.
At the 6th plenary meeting held at the Government Complex Sejong on the same day, the business and labor sectors failed to narrow their differences over the differential application of minimum wages by industry. The business sector demanded differential application by industry, while the labor sector opposed it, urging to stop the claim for differential application in consideration of the legal purpose of guaranteeing the minimum wage level and stabilizing workers' livelihoods.
Ryu Ki-jung, Executive Director of the Korea Employers Federation (KEF) representing the business sector, pointed out, "The current minimum wage exceeds the appropriate upper limit of 60% of the median wage and stands at 65.8% of the median wage," adding, "In some industries, the minimum wage approaches 90% of the median wage." Executive Director Ryu argued, "In industries such as lodging and food service, voices saying that even the current minimum wage is difficult to bear are inevitably growing," and insisted, "The practice of uniformly raising the minimum wage without distinguishing industries, ignoring reality, must now change."
Lee Myung-ro, Head of the Human Resources Policy Division at the Korea Federation of SMEs, argued regarding the 'recruitment difficulties in applicable industries,' one of the concerns raised by the labor sector about differential application of the minimum wage, "The occurrence of recruitment difficulties means that the business situation is good, and such companies can solve recruitment difficulties by paying appropriate wages regardless of the minimum wage."
Regarding the criticism that even large corporations or excellent SMEs with good business conditions could be subject to differential application by industry and thus receive a lower minimum wage, he said, "Such companies can be excluded from the differential application."
Lee said, "The decline in a company's ability to pay is the result of low labor productivity of workers and low management productivity of employers, which is a joint responsibility of labor and management, and it is unreasonable for only employers to bear the responsibility," adding, "The government should solve the issue of guaranteeing the living standards of workers who receive a lower minimum wage due to differential application through social welfare policies such as the earned income tax credit."
On the other hand, Lee Mi-seon, Vice Chairperson of the Korean Confederation of Trade Unions (KCTU), became tearful while mentioning KCTU members who were dragged away after demanding a meeting with Minister Lee Jeong-sik of the Ministry of Employment and Labor at the Seoul Regional Employment and Labor Office the day before, advocating for the 'abolition of discriminatory application of the minimum wage.'
Vice Chairperson Lee criticized, "Minimum wage workers who earn about 2 million won a month cannot survive in this crazy inflation era if their wages go down further," and said, "Differential application of the minimum wage means not guaranteeing the minimum wage level for some types of labor and not guaranteeing livelihood stability for some workers."
She pointed out, "Differential application of the minimum wage directly violates the purpose and intent of the Minimum Wage Act," and criticized, "The fact that the Minimum Wage Commission is discussing differential application itself should be ashamed."
Vice Chairperson Lee criticized, "Minimum wage workers receive about 1.85 million won a month after taxes, while the reported living expenses for single, unmarried workers last year were 2.46 million won," and asked, "Is it right to cut wages further for workers who support households and family livelihoods under such circumstances with 1.85 million won?"
She emphasized, "The pain of small business owners and self-employed people stems from the commission fees extorted by large corporations, high loan interest rates, and the encroachment of franchise chains into local markets, but the business sector talks as if these things do not exist and tries to cut workers' wages by putting forward small business owners and the self-employed."
Kim Dong-myeong, Chairman of the Federation of Korean Trade Unions, Yang Kyung-soo, Chairman of the Korean Confederation of Trade Unions, and members of the two major trade unions are holding a "Press Conference for the National Assembly Proclamation of the Minimum Wage Anti-Discrimination Act" on the steps in front of the main building of the National Assembly on the 3rd. Photo by Kim Hyun-min kimhyun81@
Ryu Ki-seop, Secretary General of the Federation of Korean Trade Unions (FKTU), said, "The Minimum Wage Commission has the duty and responsibility to deliberate the minimum wage to improve and stabilize the lives of low-wage workers," and added, "I hope the claims for discriminatory application by industry, which are unrelated to the original purpose of the minimum wage, will stop and discussions on next year's minimum wage level will begin."
At the plenary meeting that day, Kwon Soon-won, a public interest committee secretary and professor at Sookmyung Women's University, gave an opening remark, stating, "I will focus and devote myself to the deliberations to produce the best results without being bound by time." Although the legal deadline for minimum wage deliberations arrived that day, the two sides stood firm against each other, leading to delayed deliberations again this year.
On that day, the positions of labor and management ran parallel regarding differential payment by industry. Differential application of the minimum wage is based on Article 4 of the Minimum Wage Act, which states that "the minimum wage may be applied separately by type of business." However, except for the year the minimum wage system was introduced in 1988, it has never actually been implemented.
On that day, the business sector proposed Korean Standard Industrial Classification-based industries such as Korean food, foreign food, other simple restaurants, taxi transportation, and chain convenience stores as industries requiring differential payment. The business sector strongly argued for the necessity of differential application due to the management difficulties of small business owners and self-employed people and the continued increase in the minimum wage, but the labor sector opposed it absolutely, so whether to apply differential treatment is expected to be decided by a vote.
The meeting that day was unable to present even the initial proposal for the minimum wage increase rate as the dispute over differential application prolonged. Once labor and management present their minimum wage proposals, plenary meetings will be held two to three times a week to narrow the differences between the two sides. The deadline for the Minister of Employment and Labor to announce next year's minimum wage is August 5. Considering that administrative procedures such as objections take about 20 days, an agreement must be reached by mid-next month.
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