Second Revised Proposals Presented at Meeting on the 26th
Management Raises Offer from 10,060 Won to 10,070 Won
Labor Lowers Initial Proposal from 11,500 Won by 40 Won
Minimum Wage Commission Schedules 8th Plenary Session for July 1
Labor and management, who have begun earnest negotiations over next year's minimum wage, each presented their second revised proposals on the 26th, following the first round. In the first round, only the management side raised their wage proposal compared to their initial offer. In the second round, both labor and management adjusted their proposals, with management increasing and labor decreasing their respective figures. As a result, the gap between management (10,070 won) and labor (11,460 won) narrowed to 1,390 won.
The 7th plenary meeting of the Minimum Wage Commission held on the 26th at the Government Sejong Complex. Photo by Yonhap News
The Minimum Wage Commission held its 7th plenary meeting on the 26th at the Government Sejong Complex. A total of 26 members attended the meeting, including 9 labor representatives, 9 management representatives, and 8 public interest representatives.
On this day, labor and management each submitted their second revised proposals regarding next year's minimum wage, following the first round. In the second revision, management proposed 10,070 won, an increase of 40 won (0.4%) from their initial offer. Labor demanded 11,460 won, which is 40 won (0.3%) lower than their initial proposal of 11,500 won, but still 1,430 won (14.3%) higher than this year's minimum wage.
In the first round, management requested 10,060 won, which was 30 won (0.3%) higher than their initial offer. Labor maintained their initial proposal of 11,500 won, which is 1,470 won (14.7%) higher than this year's minimum wage. Through the first and second rounds of revisions, the gap between labor and management narrowed from 1,440 won to 1,390 won.
Although the gap has narrowed, significant differences remain between labor and management. The management side argued that, since the discussion on differentiated minimum wages by industry was dismissed at the previous plenary meeting, a single minimum wage applicable to all industries should be set. Labor insisted that next year's minimum wage proposal reflects the current economic situation.
Ryu Kijeong, Executive Managing Director of the Korea Employers Federation, stated, "Since a single minimum wage must be set without industry distinctions, next year's level should be determined based on the most difficult business sectors." He added, "When considering the four legal criteria for wage determination?company's ability to pay, cost of living, wage levels of similar workers, and income distribution ratio?it is difficult to justify an increase in next year's minimum wage over this year's level."
He also emphasized, "The payment capacity of small business owners and micro-enterprises has reached its limit." He continued, "In terms of income distribution, key indicators such as the Gini coefficient, relative poverty rate, and income quintile ratio showed almost no improvement based on market income in 2018 and 2019, when the minimum wage was significantly increased." He pointed out, "It is not appropriate to further raise the minimum wage for the purpose of income distribution, given the large negative spillover effects."
Ryu Giseop, Secretary-General of the Federation of Korean Trade Unions, stated, "11,500 won is an extremely reasonable and rational level." He added, "As shown in the cost of living report provided for this year's minimum wage review, households of minimum wage workers with multiple members require much higher living expenses than the current minimum wage level allows."
He also said, "The initial demand level from labor representatives is about half of what it was in previous years," and explained, "We have actively considered and reflected the sharply depressed domestic demand caused by the harsh political situation last winter." He continued, "We hope that this year's minimum wage decision will establish a level that reflects the purpose and intent of the Minimum Wage Act, which is to ensure the livelihood stability of low-wage workers, as well as the living expenses of workers."
Given the remaining differences between labor and management, the Minimum Wage Commission plans to hold its 8th plenary meeting on July 1 to further narrow the gap. As a result, the statutory review deadline for this year's minimum wage (June 29) will again be missed.
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