South Korea finalizes next year's minimum wage at 10,700 won per hour

SEOUL, August 5 (AJP) - South Korea's minimum wage for next year was finalized at 10,700 won (about US$7) per hour on Wednesday, following an agreement reached last month by a 27-member committee comprising nine representatives each from workers, employers and government-appointed independent members.

The Ministry of Employment and Labor said the new minimum wage will take effect on Jan. 1 and apply uniformly across all industries and workplaces. For full-time employees, it amounts to a monthly salary of 2.24 million won based on a 40-hour workweek, up 79,420 won from this year.

After several rounds of negotiations, the committee agreed on July 14 to raise the minimum hourly wage by 3.7 percent from the current 10,320 won to 10,700 won next year. Even after the deal was reached, both labor and small-business groups had raised objections, calling for broader labor protection.

The Federation of Korean Trade Unions (FKTU) called the agreement "deeply disappointing," saying it failed to reflect the struggles of low-wage workers and rising living costs and calling for minimum wage coverage to be extended to contract workers and platform workers including delivery workers and riders.

On the other hand, the Korea Federation of Micro Enterprises (KFME) opposed the decision, warning that the increase could hurt small-business owners and result in more job losses.

The ministry rejected both objections after deliberation. No minimum wage decision has been returned for reconsideration since South Korea began setting a minimum wage in 1988.

Meanwhile, the 3.7 percent increase is the largest since 2023, following increases of 2.5 percent in 2024, 1.7 percent in 2025 and 2.9 percent this year. It also stands 0.9 percentage points above July's annual consumer inflation rate of 2.8 percent, although the actual benefit for low-paid workers will depend on price movements before and after the new rate takes effect.

The committee estimates that the increase will directly affect 660,000 workers or 3.8 percent of employees, based on a workplace survey, while a separate economically active population survey puts the figure at nearly 3 million or 13.3 percent of employees.

The ministry said it would step up public guidance and workplace inspections to ensure businesses follow the new minimum wage rules.

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