The minimum wage for next year has been set at $10.70 per hour, a 3.7% increase from this year, prompting disappointment from small business and medium enterprise sectors.
In a statement on July 15, the Small Business Association expressed concern that the 2027 minimum wage, including paid leave, will reach $12.84 per hour, translating to a monthly amount of 2,236,300 won, surpassing the 2 million won mark.
The association stated, "This additional increase in the minimum wage exceeds the inflation rate, which could exacerbate the economic challenges faced by small businesses, the backbone of the national economy. We hold the government and the National Assembly accountable for neglecting the outdated minimum wage system for over 40 years."
They warned that rising labor costs could lead to further job reductions among small business owners, highlighting the "paradox of minimum wage" where higher rates threaten jobs for vulnerable groups. They called for a comprehensive reassessment of the necessity of the minimum wage system.
Regarding the failure to implement a differentiated minimum wage by industry, the association noted, "Major countries around the world set minimum wages flexibly based on region, industry, and skill level. The Minimum Wage Act clearly states in Article 4, Section 1 that it can be determined by the type of business."
The Small Business Association urged the government and the National Assembly to immediately reform the minimum wage decision structure, including biennial determinations, differentiated applications, and consideration of small business payment capabilities.
They also strongly urged the revival of job stability funds and the expansion of management stability support for small businesses to alleviate their burdens.
The medium enterprise sector also called for prompt measures to protect jobs for vulnerable groups. The Small and Medium Enterprises Central Association criticized the minimum wage committee's decision, stating, "Micro-enterprises and small businesses on the brink of collapse will be forced to reduce employment or shut down due to excessive labor costs."
The association emphasized that small businesses and medium enterprises are the backbone of the low-wage system and called for improvements to ensure that the decision-making criteria reflect the payment capabilities of businesses to create a sustainable minimum wage system.
* This article has been translated by AI.
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