On July 14, Kwon Soon-won, chair of the Minimum Wage Commission, expressed hope that excess tax revenue from sectors like semiconductors could be used to support minimum wage workers, small businesses, and micro-enterprises. He described the recommendations made during the deliberations as a call for comprehensive improvements to the minimum wage system.
After the minimum wage deliberations, Kwon told reporters, "Many employees of small businesses work for major companies like Samsung Electronics and SK Hynix. Since they contribute to the success of these companies, I hope some of the taxes generated from their performance can be allocated to small businesses and micro-enterprises."
Earlier that day, the commission finalized the minimum wage for the upcoming year at 10,700 won per hour, a 3.7% increase from the previous year. Public interest members had recommended a higher figure of 10,720 won, reflecting a 3.9% increase, but an agreement could not be reached. Consequently, the worker and employer representatives voted on proposals of 10,730 won and 10,700 won to determine the new minimum wage.
Kwon expressed disappointment over the lack of consensus, noting, "Last year, while labor and management reached an agreement, members of the Korean Confederation of Trade Unions left the meeting at the last moment. This year, all 27 members remained until the decision was made. The final amendment was only 130 won apart, and the voting margin was just 30 won, so I consider this a vote that approximates an agreement."
He added, "Some sectors are experiencing unprecedented prosperity, while there have been controversies surrounding performance bonuses in certain companies. However, the impact of these factors is more complex than just the nominal figures. The discussions focused on understanding the realities faced by small businesses and micro-enterprises subject to the minimum wage, and both sides had significant concerns."
During the meeting, public interest members proposed a deliberation range of 10,600 won to 10,860 won, which represents an increase of at least 2.7% and up to 5.25% from the current minimum wage. The lower limit is based on the consumer price inflation forecast from the Bank of Korea and the Korea Development Institute (KDI) at 2.7%, while the upper limit combines the inflation forecast with the average economic growth rate forecast of 2.55% from both institutions.
This range excludes the employment growth rate that was included in last year's deliberation range. Additionally, the government's economic growth forecast of 3.0% announced on the same day as the meeting was also omitted.
Kwon explained, "The deliberation range cannot be the same every year. Different criteria are used depending on the situation and conditions. Since the proposals from both labor and management are considered from various dimensions, the upper and lower limits must change annually."
He further noted, "The deliberation range has been a topic of discussion since the last session. There were time constraints that prevented us from incorporating the newly announced information immediately."
During the deliberations, public interest members also recommended that the government discuss overall improvements to the minimum wage system.
They stated, "During this year's deliberation process, we discussed the scope of the Minimum Wage Act, the criteria for determining the minimum wage, and the minimum wage for subcontracting. However, the related agenda items did not reach an agreement and were rejected. We recommend that the Ministry of Employment and Labor establish a task force for system improvement in the second half of the year to comprehensively review and research the current minimum wage system, including its application scope and determination criteria, and develop a comprehensive improvement plan."
In response, Kwon remarked, "Similar discussions have been stalled for the past three years, and there are aspects that are difficult to accommodate within the current system. We need to conduct surveys and gather opinions from the field to determine the feasible range for improvements and how to proceed with the task force effectively."
He added, "The current administration's national agenda includes 'improving the minimum wage system,' so we aim to consolidate the various issues identified by the commission. This means that the Ministry of Labor should accept the national agenda and seek ways to improve the system."
* This article has been translated by AI.
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