Minimum Wage Commission Holds 6th Plenary Session... Debate Over 'Differentiated Minimum Wage' Continues

Employer: "Industry Gaps Can No Longer Be Overlooked"
Worker: "A Chain of Discrimination... Seeking Legal Solutions"

As discussions continue over setting the minimum wage level for next year, debate over differentiated application by industry remains ongoing. The employer representatives have consistently argued for distinguishing the minimum wage by industry, while worker representatives have continued to voice concerns about potential side effects, calling it discriminatory pay.

The 6th plenary meeting of the Minimum Wage Commission held on the 19th at the Government Sejong Complex. Photo by Yonhap News

The Minimum Wage Commission held its 6th plenary meeting on the 19th at the Government Sejong Complex. As in the 5th plenary meeting held on the 17th, employer and employee representatives who attended the meeting debated the issue of differentiated application of the minimum wage.

Ryu Gijeong, Executive Managing Director of the Korea Employers Federation and an employer representative, stated, "When analyzing the added value per employed person, the accommodation and food service industry stands at 28 million won, while the financial and insurance industry is at 180 million won, showing a 6 to 7 times difference depending on the industry." He added, "Some industries, such as accommodation and food service, and health and social welfare, have a minimum wage-to-median wage ratio of 70 to 80 percent, making it difficult even to sustain the current minimum wage level."

Ryu emphasized, "Even based on currently available indicators, the gap between industries can no longer be overlooked," and explained, "In 21 countries of the Organisation for Economic Co-operation and Development (OECD), the minimum wage has been differentiated by criteria such as industry, age, and region, thereby increasing acceptance of the minimum wage." He further stressed, "We need to implement differentiated application, at least for some industries, based on the data we have secured."

He also said, "Once the minimum wage is set, it is a mandatory regulation that all business owners must comply with," and added, "If differentiated application by industry is not introduced next year, the minimum wage level for next year should be determined based on industries that cannot even afford the current minimum wage."

Another employer representative, Lee Myungro, Director of Human Resources Policy at the Korea Federation of SMEs, explained, "In major countries such as Switzerland, Canada, and Japan, the minimum wage is differentiated based on various conditions such as industry or regional maps." He continued, "To my knowledge, Japan has set three grades of minimum wage since April 2023 and presents these to its 47 prefectures."

On the other hand, Ryu Giseop, Secretary-General of the Federation of Korean Trade Unions and a worker representative, said, "There is no objective correlation that has been investigated regarding the impact of the minimum wage on the closure rate of small business owners and micro-entrepreneurs." He continued, "The issue of the minimum wage payment capacity of small business owners and micro-entrepreneurs also needs to be examined to determine whether it is due to a significant increase in the minimum wage making it unaffordable, or whether it is due to an inability to properly measure wages during the payment process."

He added, "Differentiated application of the minimum wage could institutionalize a 'chain of discrimination' that extends to region, age, nationality, gender, and even migrant workers, which is an irresponsible argument." He emphasized, "The minimum wage is intended to promote domestic economic vitality by boosting consumption capacity, and we need to seek solutions that consider legally based living costs and prices."

Im Miseon, Vice Chair of the Korean Confederation of Trade Unions, also stated firmly, "The spark of differentiated minimum wage by industry, which was a campaign pledge of former President Yoon Sukyeol, must now be extinguished." She further expressed concern, "Differentiated pay does not simply mean a wage gap. It sends a message to society as a whole that 'some people do not deserve to be treated as human' or 'some work is more degrading.'"

Vice Chair Im criticized, "If cutting wages could boost consumption and revive the economy, we would have become an advanced economy long ago. Applying a minimum wage lower than the current level in a top-down differentiated manner is a policy that would harm both workers and the self-employed." She added, "Instead of merely talking about the survival of the self-employed, the government should actively create a structure in which the costs resulting from minimum wage increases are publicly shared and compensated."