Minimum Wage Proposal: 'Labor 12,600 Won vs Management 9,860 Won Freeze' Presented

It Seems It Will Be Decided by Next Week at the Latest

Next year, the labor sector has demanded an increase in the minimum wage to 12,600 won, while the business sector has requested to keep it frozen at 9,860 won.

Members of the Workers' Committee of the Minimum Wage Commission
Photo by Yonhap News

On the 9th, the worker and employer representatives of the Minimum Wage Commission each presented these initial proposals at the 9th plenary meeting of the Minimum Wage Commission held at the Government Sejong Complex. The labor sector demanded an amount 27.8% higher than this year, while the business sector requested a freeze for the fourth consecutive year.

The labor sector argued that the minimum wage must be significantly raised considering the ongoing high inflation and the decline in real wages of workers, which have made it difficult for low-wage workers to make a living. Ryu Gi-seop, Secretary General of the Korean Confederation of Trade Unions, said, "In recent years, the increase in the minimum wage has not kept pace with the inflation rate, resulting in a decline in workers' real wages," adding, "Income distribution indicators are worsening again, marking a very concerning point for serious inequality and polarization."

On the other hand, the business sector stated that the minimum wage should remain stable, considering the weakened payment capacity of small and medium-sized enterprises and small business owners. Ryu Gi-jeong, Executive Director of the Korea Employers Federation (KEF), said, "Generally, the appropriate upper limit for the minimum wage to operate without side effects is 60% of the median wage, but our minimum wage is already 65.8% of the median wage, exceeding the appropriate level." He added, "In the past five years, the minimum wage increase rate has exceeded twice the inflation rate," and "Raising the minimum wage excessively should not cause frustration and hardship to struggling small and medium-sized enterprises and small business owners."

After the initial proposals were presented, both sides began narrowing the gap by submitting several revised proposals. Since it is difficult to reach an agreement, decisions are generally made by voting, with public interest commissioners playing a decisive role. Considering the schedule to announce next year’s minimum wage by the 5th of next month, the minimum wage is expected to be decided by the middle of next month at the latest.