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 deliberation as a call for comprehensive improvements to the minimum wage system.
After the minimum wage deliberation, Kwon told reporters, "Many employees of small businesses work for major companies like Samsung Electronics and SK Hynix. Since they contribute to the results, I hope some of the taxes generated from these results can be allocated to small businesses and micro-enterprises."
Earlier that day, the commission finalized the minimum wage for the next year at 10,700 won per hour, a 3.7% increase from this year. Public interest members had recommended a compromise of 10,720 won, which was 3.9% higher than this year's wage, but no agreement was 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 end. This year, all 27 members stayed until the decision was made. The final amendment was only 130 won apart, and the voting was conducted with a 30 won margin, so I consider it a vote akin to an agreement."
He added, "Some sectors are experiencing unprecedented booms, while there have been controversies surrounding bonuses in certain companies. However, the impact is more complex than just 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 many concerns."
During the meeting, public interest members proposed a deliberation range of 10,600 won to 10,860 won, representing a minimum increase of 2.7% and a maximum of 5.25% over this year's minimum wage. The lower limit was 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 included the average of the inflation forecast and economic growth rate forecast of 2.55% from both institutions.
This range excluded the employment growth rate that was part of last year's deliberation range. Additionally, the government's economic growth forecast of 3.0% announced in its second-half economic growth strategy was also omitted.
Kwon explained, "The deliberation range cannot be the same every year. Different standards are used depending on the situation and conditions. Since the proposals from both sides are considered from various dimensions, the upper and lower limits will inevitably change each year."
He further noted, "The deliberation range has been a topic of discussion since the last session. There were time constraints in incorporating the content announced today immediately."
During the deliberation, public interest members also suggested 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 system improvement task force 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 to 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 under the current system. We need to conduct a survey to determine the feasible range and how to improve the system, and properly establish a task force to facilitate discussions."
He added, "The current administration's national agenda includes 'improving the minimum wage system,' so we should consolidate the various issues identified by the commission. This means that the Ministry of Labor should accept the national agenda content and seek ways to improve the system."
* This article has been translated by AI.
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