Labor and Management Clash Over Differentiated Minimum Wage: "Small Business Owners at Their Limit" vs "Discrimination Against Workers"

7th Plenary Session of the Minimum Wage Commission Held on June 18

The debate between business and labor groups over applying different minimum wages by industry continued on June 18.

The Minimum Wage Commission held its 7th plenary session at the Government Complex Sejong on this day. As in the previous meeting, labor and management showed contrasting views regarding the differentiated application of the minimum wage by industry. The business community argued that vulnerable sectors such as accommodation and food services, which have been hit hard by the domestic demand slump, should be subject to a lower minimum wage than other sectors. Ryu Kijeong, Executive Managing Director of the Korea Employers Federation, stated, "In sectors such as accommodation and food services, the minimum wage amounts to 70 to 80 percent of the median wage," adding, "We can no longer delay the implementation of this system." He further emphasized, "We must reflect the urgent realities faced on the ground, which have reached their limits," and requested, "In order to promote coexistence between small business owners and workers and to increase the acceptance of the minimum wage system, we are asking for the application of industry-based differentiation, even for a limited number of sectors, as permitted by current law."

Yonhap News Agency

Yang Okseok, Director of Workforce Policy at the Korea Federation of SMEs, also argued, "Small business owners in vulnerable sectors like accommodation and food services have reached a point where, even if they want to comply with the law, it is simply impossible." He added, "There are just too many people living with lost futures after closing their businesses and being saddled with debt." He went on to say, "The differentiated application by industry is a regulatory adjustment mechanism introduced to mitigate the side effects of universal application of the minimum wage," and explained, "Now that the negative effects of a sharply increased minimum wage have become apparent, differentiated application is both a measure to bring wages in vulnerable sectors to a balanced level and the minimum step necessary to protect jobs at small businesses."

On the other hand, labor groups opposed the differentiated application by industry, arguing that it constitutes discriminatory treatment contrary to the intent and purpose of the minimum wage system. Lee Miseon, Vice President of the Korean Confederation of Trade Unions, countered, "The business community's proposal to revive the industry-based differentiation, which was only temporarily applied in the first year of the law's implementation, is no different from flogging a dead horse," and added, "No matter how it is presented, the essence is to freeze or reduce the minimum wage." She stressed, "Stop making the minimum wage a scapegoat and devaluing the worth of labor," and called for, "An end to attempts at discriminatory application that foster inequality, and the guarantee of real wages so that all workers can lead a dignified life."

Ryu Kiseop, Secretary General of the Federation of Korean Trade Unions, said, "The labor community has never turned a blind eye to the crisis faced by the self-employed," and argued, "The fundamental causes of the crisis in self-employment are not the minimum wage, but structural issues such as high platform company commissions, the shifting of costs by franchisors, excessive rents, and the decline of commercial districts." He urged the public interest members of the commission, saying, "Please demonstrate a sincere attitude toward solidarity with workers. This issue is not only about employer organizations, but also about the active mediation role that public interest members should play."

The issue of differentiated minimum wages by industry is a recurring point of sharp contention between labor and management every year. Although it is legally permitted and was applied temporarily in the first year of the system in 1988, due to opposition from labor groups and other factors, a single minimum wage system has been maintained since 1989.

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