On June 30, the Minimum Wage Commission held its 10th plenary meeting at the Government Sejong Center to continue discussions on the minimum wage level for 2027.
In a closed-door meeting, both sides submitted their first revised proposals. Labor proposed an hourly wage of 11,970 Won, a 16.0% increase from the previous year, while management suggested 10,340 Won, a 0.2% increase. Labor reduced its initial demand of 12,000 Won by 30 Won, while management raised its freeze proposal of 10,320 Won by 20 Won, resulting in a gap of 1,630 Won between the two sides.
Kwon Soon-won, chair of the Minimum Wage Commission, stated, "Yesterday was the last day of the legal review period, but considering the meeting schedule, today is effectively the final meeting. I urge both sides to do their utmost to narrow the gap between their initial proposals."
Before the meeting began, both sides engaged in a tense standoff, displaying placards. Labor called for a raise to 12,000 Won, while management emphasized the need for a freeze, citing the challenges faced by small businesses.
Management has argued for a freeze, citing the payment capabilities of small businesses and employment conditions. Ryu Gi-jeong, executive director of the Korea Employers Federation, claimed, "Considering the weekly holiday allowance, this year’s minimum wage has already exceeded 12,000 Won. Including the five major social insurances and retirement benefits, the actual labor cost for hiring one minimum wage worker is around 2.6 million Won per month."
He added, "In the field, there are voices expressing that they cannot even consider new hires, and maintaining existing employment is becoming difficult. The minimum wage increase is linked to 27 laws and 46 systems, including the Employment Insurance Act, and affects national finances and prices, so it must be decided very cautiously."
Yang Ok-seok, head of the Human Resources Policy Division at the Korea Federation of Small and Medium Businesses, pointed out that labor's initial demand for an hourly wage of 12,000 Won represents a 16.3% increase from this year, similar to the significant increase in 2018. He noted, "The increase at that time was 1,060 Won, but this time it is 1,680 Won, which is 60% larger, and it will be a significant shock to small businesses and self-employed individuals who are already at their limits in maintaining employment."
Conversely, labor representatives assert that increasing the minimum wage is crucial for economic recovery and the survival of low-wage workers. Ryu Gi-seop, secretary-general of the Korean Confederation of Trade Unions, stated, "The perspective of viewing the minimum wage solely as a cost is a short-sighted view. Increasing the minimum wage also has positive effects, such as boosting sales due to increased consumption and improving productivity."
He emphasized, "Without a bold increase in the minimum wage, it will be difficult to revitalize the stagnant domestic economy, and we must ensure the real income of low-wage workers."
Lee Mi-sun, vice-chair of the Korean Confederation of Trade Unions, criticized management's call for a freeze, stating it effectively amounts to a cut. She argued, "The real threat to workers' jobs is not the increase in the minimum wage, but the attitude of companies that view labor solely as a cost."
Public interest committee members urged both sides to narrow the gap. Seong Jae-min, secretary of the public interest committee, said, "It is now time to move beyond merely confirming each other's positions and to find common ground to seriously narrow the differences. We need to pool our wisdom to find a direction that the public can accept."
This year’s legal review deadline was on June 29, but the two sides failed to narrow their differences, ultimately exceeding the deadline. The Minimum Wage Commission has only met the legal review deadline nine times since the system was introduced in 1988.
Considering the remaining administrative procedures, the Minimum Wage Commission must submit its proposal to the Minister of Employment and Labor by mid-July at the latest. The minister will then finalize and announce the minimum wage by August 5, following a period for objections.
* This article has been translated by AI.
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