"Three-Year Pilot" vs. "Justifying Discrimination": Labor and Management Clash Over Differential Minimum Wage Application

6th Plenary Meeting of the Minimum Wage Commission Held on June 16

As the Minimum Wage Commission began discussions on June 16 regarding the differential application of minimum wage by industry, business representatives proposed a pilot program in which only half of the minimum wage increase rate would be applied for certain sectors, such as restaurants, that have lost the ability to pay. In response, labor groups strongly opposed the idea, arguing that differentiating by industry would legitimize discrimination by labeling certain workers.

The Federation of Korean Trade Unions, the Korean Confederation of Trade Unions, and the Minimum Wage Movement Headquarters for All held a press conference on June 15 at the stairs of Sejong Center for the Performing Arts in Jongno-gu, Seoul, announcing their minimum wage demands for 2027. Photo by Dongjoo Yoon

Business Side: "Three-Year Pilot for Certain Sectors" vs. Labor Side: "Means of Justifying Discrimination Against Workers"

The Minimum Wage Commission held its sixth plenary session at 3 p.m. that day at the Government Complex Sejong, officially starting discussions on the differential application of minimum wage by industry. Article 4 of the current Minimum Wage Act stipulates that "minimum wage may be set by type of business." However, this provision has only been implemented once, in 1988, the first year the law came into effect. Since then, it has not been enforced due to the difficulty of setting criteria for each industry and strong opposition from labor groups.

During the meeting, Yang Okseok, Head of HR Policy at the Korea Federation of SMEs, proposed a three-year pilot program for applying differential minimum wages to certain industries. He stated, "At the very least, let us try differential application for those sectors that have lost their ability to pay," and suggested, "To prevent excessive gaps or stigma, the maximum difference in minimum wage between industries should be kept within 10%." He further argued, "Differential application by industry will serve as a lifeline for sectors on the brink of collapse, helping them maintain employment and survive."

Ryu Gijeong, Executive Director of the Korea Employers Federation, also pointed out, "The outstanding loan balance for the lodging and restaurant sectors reached approximately 356 trillion won at the end of the first quarter this year, an all-time high," and added, "Uniform minimum wage increases that fail to take into account the specific circumstances of each industry aggravate the burden on the ground." He went on to emphasize, "The minimum wage violation rate in the lodging and restaurant sectors is 31.6%, more than eight times higher than the 3.7% in manufacturing. Forcing uniform application despite these facts will seriously undermine the willingness of businesses to accept the minimum wage."

By contrast, labor groups strongly objected, saying that differential application is nothing less than discrimination against workers. Ryu Giseop, Secretary-General of the Federation of Korean Trade Unions, stated, "We have repeatedly said, time and again, from the past to the present, that applying different standards by industry amounts to discrimination against workers. If the minimum wage for jobs such as restaurant work is set lower, it is obvious which workers will end up taking those jobs." He also expressed concern that "it will become a means to justify discrimination, especially against foreign workers, and a tool for generating profit."

Sharp Confrontation Over Labor's '12,000 Won' Minimum Wage Proposal

Meanwhile, the two major labor unions put forward their initial demand for next year's minimum wage, calling for a 16.3% increase to 12,000 won per hour compared to this year. Executive Director Ryu criticized this as "an excessive demand that threatens even the survival of small and micro businesses." In response, Secretary-General Ryu countered, "The 12,000 won hourly wage we are proposing is by no means excessive. It reflects the minimum social demand based on common sense—how can the minimum wage be lower than the cost of a single lunch?" Imi Seon, Vice-Chair of the Korean Confederation of Trade Unions, also stressed, "This amount represents the bare minimum survival cost for low-wage workers in an era of unprecedented high prices and high oil costs."

This content was produced with the assistance of AI translation services.