The tug-of-war between labor and management over next year's minimum wage is intensifying, with small business owners expressing heightened concerns.
According to the small business sector, the Minimum Wage Commission will hold its 12th full committee meeting on July 7 at the Government Sejong Center. The current minimum wage deliberation has already surpassed the legal deadline of June 29. Considering the administrative procedures, including the final announcement date by the Minister of Employment and Labor on August 5 and the period for objections, a final decision must be reached by mid-July at the latest. If no conclusion is reached on July 7, another full committee meeting will be held on July 9. Last year, the minimum wage was dramatically settled around 11:30 PM on July 10.
The fourth revised proposals from both sides indicate a narrowing gap, from an initial demand of 1,680 won to 1,290 won. Worker representatives proposed a minimum wage of 11,700 won, a 13.4% increase from this year, down from their original request of 12,000 won. Meanwhile, employer representatives suggested a slight increase to 10,410 won, up 90 won from their initial proposal to freeze the wage at 10,320 won, representing a 0.9% increase. Although both sides have made some concessions, they have yet to close the gap of nearly 1,000 won, leading to the likelihood that the public interest committee will propose a 'review facilitation range' for a vote.
The small business sector fears that even a slight increase in the minimum wage will exacerbate the financial difficulties faced by struggling small business owners. According to the Small Business Association, the average monthly income for small business owners in South Korea is only 1.91 million won as of 2024. Some have pointed out that due to sluggish sales and high inflation, a phenomenon where business owners earn less than part-time workers has become entrenched. Given this situation, there are concerns that both the labor sector's demands and the management's proposed increase of 10,410 won will impose significant labor cost burdens on already struggling small business owners.
The small business sector insists that the discussions must ensure 'industry-specific minimum wage application' and a freeze at this year's level of 10,320 won. They argue that applying the same standards as large corporations to small industries, where labor costs are a significant concern, threatens the survival of small business owners.
Ryu Pil-seon, a member of the Small Business Association, stated, "A final conclusion must be reached in the meetings on July 7 and 9. However, if an unbearable increase is proposed without considering the dire income structure and survival rights of small business owners, we will continue to raise strong voices from the industry."
* This article has been translated by AI.
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