The annual struggle over minimum wage has resurfaced this summer. After nine rounds of revisions, the gap between labor and management proposals for next year's minimum wage has narrowed to 690 won, but an agreement has yet to be reached. A final review is set for July 14.
Negotiation Stalemate Continues
According to industry sources, the Minimum Wage Commission held its 13th plenary meeting on July 9 at the Government Sejong Center. During marathon negotiations, both sides presented their proposals through the seventh, eighth, and ninth revisions in an effort to close the gap.
In the latest ninth revision, labor representatives demanded a minimum wage of 11,220 won per hour, which is 900 won (8.7%) higher than the current minimum wage of 10,320 won. This figure is 780 won lower than their initial demand of 12,000 won and 30 won lower than the previous eighth revision. Meanwhile, management raised their proposal to around 10,530 won, but the two sides could not reach a consensus. The commission ultimately decided to continue discussions at the 14th plenary meeting on July 14.
While the apparent issue seems to be a simple disagreement over numbers, the atmosphere during the 13th meeting was particularly tense. Two representatives from the Small Business Association walked out in protest against the proposed minimum wage increase and the intense pressure surrounding the discussions. This incident highlights the growing frustration among small business owners, who are struggling to survive amid high inflation, rising interest rates, and prolonged sluggish domestic demand.
Challenges for Small Business Owners
The problem lies in the fact that as the minimum wage appears to be heading toward an increase, small business owners with limited financial capacity are pushed to the brink. According to a survey by the Ministry of SMEs and Startups, the average monthly income for small business owners was just 1.91 million won in 2024. For many owners earning less than their employees, hiring becomes a distant dream. A significant number of family-run businesses rely on family members working together to make ends meet.
The Minimum Wage Commission is required to submit its findings to the Minister of Employment and Labor by mid-July, considering any objections and administrative procedures. The minister is mandated to finalize the minimum wage by August 5. However, some observers believe that with the gap narrowed to 690 won, the upcoming 14th plenary meeting may lead to a vote or a compromise proposal from the public interest committee to reach a conclusion. Nonetheless, a resolution reached through mere number adjustments may not fully address the underlying conflicts in the field.
With the Small Business Association's strong demand for a differentiated application by industry already rejected, there are concerns that a uniform increase without considering the actual payment capacity of small businesses could lead to closures and job losses in vulnerable sectors.
Song Chi-young, president of the Small Business Association, held a press conference on July 2 in front of the Ministry of Employment and Labor in Sejong, stating, "To revive the dwindling light of small businesses, a reasonable coexistence plan that reflects the management environment of small businesses must be developed. If an unbearable level of increase is proposed that disregards the survival rights of small businesses, it will serve as a signal that shakes the very foundation of the South Korean economy."
* This article has been translated by AI.
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