Minimum Wage Tug-of-War Begins: "Essential for Basic Survival" vs. "Excessive Hike Will Eliminate Jobs"

8th Plenary Meeting of the Minimum Wage Commission Held on June 23

The tug-of-war between labor and management over next year's minimum wage increase has begun. While the labor community is demanding an hourly wage of 12,000 won, arguing that the minimum wage must be raised to ensure basic survival, management has pushed back, claiming that "an excessive increase in the minimum wage will result in job losses."

On the 23rd, at the 8th plenary meeting of the Minimum Wage Commission held at the government complex in Sejong, Ki-jung Ryu, Executive Director of the Korea Employers Federation (KEF), is speaking. Photo by Yonhap News

On June 23, the Minimum Wage Commission held its 8th plenary meeting at the Government Complex Sejong to discuss the minimum wage increase rate for the following year. Ryu Giseop, Secretary General of the Federation of Korean Trade Unions (FKTU) representing the workers, said, "Recently, major economic agencies have revised up their economic growth forecasts due to strong semiconductor exports, but the extraordinary profits of large corporations are concentrated only at the top." He added, "We are living in an era where livelihood crises are being caused by labor market polarization." He continued, "Our demand for a minimum hourly wage of 12,000 won has been formulated against this backdrop," emphasizing, "This is a practical measure to stabilize the livelihoods of low-wage and vulnerable groups who can no longer withstand the decline in real wages due to high oil prices and high inflation, and to protect the local economy and small business owners by stimulating consumption and reviving domestic demand."

Lee Miseon, Vice President of the Korean Confederation of Trade Unions (KCTU), said, "The media is celebrating the prospect of the KOSPI reaching 10,000, but for low-wage workers, such news feels far removed from their reality." She added, "The reality faced by workers on the current minimum wage is extremely harsh." She further emphasized, "It is not that rising minimum wages cause prices to go up; rather, workers are crying out that they cannot afford to live because prices have risen so much, so the minimum wage must be raised for their basic survival." She asserted, "Next year's minimum wage of 12,000 won is not about seeking a lavish life, but is a measure for the bare minimum survival of families."

At the 8th plenary meeting held on the 3rd at the Minimum Wage Commission in the Government Sejong Complex, Ryu Kijeong, Executive Director of the Korea Employers Federation (left), a user committee member, and Ryu Kisub, Secretary General of the Federation of Korean Trade Unions, a labor committee member, listened with stern expressions. Photo by Yonhap News Agency

On the other hand, Ryu Kijeong, Executive Director of the Korea Employers Federation (KEF), representing the employers, said, "Our minimum wage is already at a fairly high level due to years of cumulative high increases." He stressed, "Even in international comparisons, the net minimum wage is 17.9% higher than the average of the Group of Seven (G7) nations." He continued, "This elevated minimum wage is greatly reducing acceptance on the ground," and argued, "Since a single minimum wage must be set, next year's minimum wage should be determined based on the industry and business size that are facing the greatest difficulties."

Yang Okseok, Director of Workforce Policy at the Korea Federation of SMEs, pointed out, "If the minimum wage rises faster than labor productivity, jobs will disappear, and ultra-short-term work and 'split' employment will increase, further distorting the employment structure." He added, "With the pressure of rising labor costs, it will become more difficult to invest and pursue research and development (R&D), further deepening the divide between large corporations and SMEs." He continued, "An excessive minimum wage increase will also reduce consumer benefits and repeat the vicious cycle of rising prices," adding, "I hope this year's review of the minimum wage level does not ignore the realities faced by companies and leads to a reasonable decision."

During the meeting, management did not announce its initial proposal for next year's minimum wage. It is known that some employer committee members have even suggested a reduction, and internal coordination is still underway. Previously, the labor side proposed an initial minimum wage demand of 12,000 won per hour, a 16.3% increase from this year's 10,320 won, and a monthly wage of 2,508,000 won (based on 209 working hours per month).

The statutory deadline for reviewing the minimum wage is June 29, which is 90 days after the Minister of Employment and Labor requested the review. Even if the final deadline is missed, the Minimum Wage Commission must submit its proposal to the Minister of Employment and Labor by mid-July, taking into account the remaining administrative procedures. The Minister of Employment and Labor must then finalize and announce the new minimum wage by August 5.

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