As final negotiations for next year's minimum wage begin, labor and management continue to engage in last-minute tensions. Public members have indicated that system improvements are necessary for progress in minimum wage discussions.
On July 14, the Minimum Wage Commission held its 14th full meeting at the Government Sejong Center to continue discussions on the minimum wage level for the upcoming year. During the 13th full meeting on July 9, labor representatives proposed a wage of 11,220 won per hour, while management suggested 10,530 won. The gap between the two sides has narrowed from an initial 1,680 won to 690 won.
Management has urged for minimal increases, citing the financial limits of small businesses. Ryu Gi-jeong, Executive Vice President of the Korea Employers Federation, stated, "The minimum wage has already reached a high level, and the payment capacity of businesses is at its limit. A conclusion must be reached that allows small business owners and SMEs to maintain employment levels."
He also noted that the rate of workers earning below the minimum wage has reached 12.4%, exceeding 30% in businesses with fewer than five employees and in the accommodation and food service sectors. He emphasized the need for a single minimum wage that applies universally, arguing that the realities of vulnerable sectors should guide the decision-making process.
Yang Ok-seok, head of the Human Resources Policy Department at the Korea Federation of Small and Medium Businesses, added, "Even a 2% increase can pose a significant threat to the survival of small businesses and self-employed individuals. With the outstanding loans of self-employed individuals reaching 1,055.5 trillion won and overdue amounts increasing to 22.3 trillion won, policies to alleviate the burden on SMEs and small business owners are necessary."
Conversely, labor representatives argue that increasing the minimum wage is essential not only for the survival of low-wage workers but also as an economic policy to stimulate domestic demand. Ryu Gi-seop, Secretary General of the Korean Confederation of Trade Unions, stated, "This year's minimum wage increase should go beyond merely covering living costs and serve as a practical catalyst for reviving the stagnant domestic market. What is needed now is not gradual adjustment but a proactive and bold decision."
He further emphasized the urgency of including workers in vulnerable positions and addressing the low-wage structure, stating, "Expanding the application of the minimum wage is crucial for restoring fairness across the labor market."
Lee Mi-sun remarked, "While incomes remain stagnant, the cost of living has skyrocketed, making it difficult for workers to afford three meals a day on the current minimum wage. The minimum wage for 2027 should be determined based on actual living costs and income distribution indicators to alleviate polarization."
Seong Jae-min, a public member and deputy director of the Korea Labor Institute, noted, "This is a critical moment for labor, management, and public members to work together to reach a meaningful conclusion. I urge everyone to make a responsible decision that considers each other's circumstances in accordance with the Minimum Wage Act."
If labor and management fail to find common ground in further negotiations, it is likely that public members will propose a range with upper and lower limits to facilitate agreement or voting. The Minister of Employment and Labor must finalize and announce next year's minimum wage by August 5. Considering administrative procedures, a decision is expected by mid-July, prompting the Minimum Wage Commission to engage in marathon negotiations to reach a conclusion.
Meanwhile, public members of the Minimum Wage Commission have expressed the need for system improvements to advance discussions on the minimum wage. They stated in a recommendation that, "In an era of rapid changes in the economy and society, including the spread of artificial intelligence (AI) and the growth of platform-based businesses, discussions on minimum wage have been repetitive and stagnant each year. Improvements to the system are necessary to address this situation and facilitate progress in discussions."
They also recommended that the Ministry of Employment and Labor establish a task force for system improvements in the second half of this year to comprehensively review and study the current minimum wage system, including its application targets and decision-making criteria, and prepare comprehensive improvement plans for future minimum wage discussions.
* This article has been translated by AI.
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