KFME: Next Year’s Minimum Wage Should Be Frozen... "Let’s Have an Open Debate"

Press Conference on 2026 Minimum Wage Stance
"An Economic Downturn Worse Than COVID-19... It Must Be Frozen"

The Korea Federation of Micro Enterprises (KFME) has insisted that next year’s minimum wage should be frozen ahead of the second plenary session on the minimum wage. The organization also demanded the urgent implementation of differential application by industry and the abolition of the weekly holiday allowance, and proposed an open debate with labor unions.

On the 26th, the '2026 Minimum Wage Related Small Business Owners' Position Announcement Press Conference' is being held at the Small Business Association building in Yeongdeungpo-gu, Seoul. Provided by Small Business Association

Next Year’s Minimum Wage Should Be 'Frozen'... "Let’s Have an Open Debate"

On the 26th, Song Chiyoung, president of the KFME, stated at the '2026 Minimum Wage Small Business Owners' Position Announcement Press Conference' held at the KFME conference room in Yeongdeungpo-gu, Seoul, "During the review process for next year's minimum wage, we will make freezing the minimum wage our top priority and strongly advocate for differential application by industry and the abolition of the weekly holiday allowance." He continued, "We propose an open debate on the minimum wage issue with the Federation of Korean Trade Unions (FKTU) and the Korean Confederation of Trade Unions (KCTU)."

The press conference was attended by President Song and user representatives from the Minimum Wage Committee affiliated with the KFME, who expressed their positions on next year’s minimum wage review.

President Song emphasized, "Small business owners are facing an unprecedented crisis, even worse than during the IMF financial crisis or the COVID-19 pandemic, due to a severe economic downturn. To make matters worse, the U.S.-led trade war has made it difficult for this year’s GDP growth rate to even reach 1%." He added, "The number of ultra-short-term workers working less than 15 hours per week has reached a record high of 1.74 million, and society must recognize that issues such as the weekly holiday allowance and minimum wage are threatening the survival of both small business owners and vulnerable workers."

He also announced the results of the 'Survey on the Impact of Minimum Wage Increases on Small Business Owners.' According to a survey conducted by the KFME from April 11 to May 6, targeting approximately 1,000 small business owners nationwide, the average annual sales growth rate of small business establishments from 2023 to 2025 was -16.7%. The main reason for declining sales was 'reduced consumption due to the economic downturn' (58.5%), followed by 'changes in business conditions' such as digital transformation and 'rising prices.'

68% in Total... "If Minimum Wage Rises, New Hiring Will Be Reduced"

Among the four factors affecting the decline in operating profit?minimum wage increases, rising raw material costs, higher energy costs, and increased rent?'minimum wage increases' had the most significant impact at 87.1%. Regarding next year’s minimum wage, 73.9% of respondents favored a 'reduction,' while 24.6% supported a 'freeze.' If the minimum wage is raised next year, the most common response was, "We will reduce new hiring to operate our businesses" (67.6%).

Park Kyungmin, CEO of Ideps PC Bang, who attended the press conference, said, "When I opened my PC Bang in 2016, the minimum wage was 6,030 won. Now, including the weekly holiday allowance, it has exceeded 12,000 won, but the hourly rate for PC Bangs has only increased by 300 won over the past ten years, from 1,200 won to 1,500 won." He continued, "As the labor cost burden has increased, the number of employees has dropped from six to four, and due to the burden of the weekly holiday allowance, we have no choice but to split shifts." Park added, "Unlike most industries that operate during the day, it is unfair to require industries that operate at night from the start to pay 1.5 times the night shift allowance. We request differential application of the minimum wage by industry and the abolition of the weekly holiday allowance, taking into account the characteristics of each sector."

Lee Gijae, president of the Korea Pet Industry Association, said, "Although the current law presents workers’ living expenses and income distribution ratio as criteria for determining the minimum wage, there is no specific formula, which results in a lack of policy consistency. Above all, employers’ 'ability to pay' is not reflected." He added, "Rational calculation factors based on data?such as the profit margins of small businesses, operating profit, and average operating profit margin by industry?should be established."