Minimum Wage Legal Deadline Missed Again... 12,000 Won Increase vs. Freeze Remain at an Impasse

As the legal deadline for deciding next year's minimum wage has passed, labor and management remained firmly divided even in the final public meeting. The labor side repeatedly demanded an increase to 12,000 won per hour, while the business side insisted that, considering the payment capacity of small businesses, the minimum wage should be frozen or set at a similar level.

On June 30, the Minimum Wage Commission held its 10th plenary session at the Government Complex Sejong to continue deliberations on the minimum wage level to be applied in 2027. Kwon Soon-won, Chair of the Minimum Wage Commission, stated, "Yesterday was the last day of the legal review period, and given the meeting schedule, today is in effect the final meeting within the deadline," adding, "I urge both labor and management to do their utmost to narrow the gap between their initial proposals."

Sungwon Kwon, Chairperson of the Minimum Wage Commission, is attending the 10th plenary meeting held at the Minimum Wage Commission at the Government Complex Sejong on the 30th. Photo by Yonhap News

The business community emphasized that the current minimum wage level is already high enough and that any further increase would threaten the survival of small businesses. Ryu Gi-jung, Executive Director of the Korea Employers Federation, said, "If we take into account the weekly holiday allowance, the current minimum wage already exceeds 12,000 won. Including the five major social insurance programs and severance pay, the actual labor cost of hiring one minimum wage worker reaches around 2.6 million won per month, which is about 1.4 times the legal minimum wage."

He went on to say, "If labor costs rise further, small and medium-sized enterprises and small business owners will have no choice but to consider not only reducing employment or raising prices, but also downsizing their businesses or shutting down altogether," stressing, "We must make a cautious decision based on a comprehensive consideration of actual payment capacity at worksites and the overall economic ripple effects."

Yang Ok-seok, Director of Human Resources Policy at the Korea Federation of SMEs, expressed concern that the 12,000 won hourly wage demanded by labor is 1,680 won (16.3%) higher than this year, which could bring about a shock similar to the sharp minimum wage increase in 2018. He noted, "At that time, the increase was 1,060 won, but now it is 1,680 won, which is about 60% larger," and added, "The decision should be to freeze or keep the increase at a similar level to ease the burden on SMEs and small business owners."

On the other hand, the labor side argued that a minimum wage increase is an essential policy for revitalizing domestic demand and stabilizing the livelihoods of low-wage workers. Ryu Ki-seop, Secretary General of the Federation of Korean Trade Unions, said, "The minimum wage is not just a cost; it is a system that reflects the value of labor, income distribution, and welfare," and emphasized, "Without a bold minimum wage increase, it will be difficult to revive the stagnating domestic economy." He also requested, "Measures to support social insurance and labor costs for small business owners and the self-employed, linked to the minimum wage increase, should also be prepared, and the public interest members should actively mediate to help narrow the gap between labor and management."

On the 30th, the 10th plenary meeting of the Minimum Wage Commission was held at the Government Complex Sejong. The decision on next year's minimum wage again exceeded the legal deadline due to differences in opinion between labor and management. Yonhap News Agency

Imi-seon, Vice Chair of the Korean Confederation of Trade Unions, pointed out, "The freeze that the business community is calling for is effectively a cut," and added, "With the skyrocketing cost of living, it is difficult to survive on the current minimum wage." She continued, "Research on cases in Germany and Greece shows that raising the minimum wage did not lead to massive employment shocks," and insisted, "The minimum wage must be raised significantly to guarantee real wages."

Sung Jae-min, the representative of the public interest members, said, "Today is in effect the final meeting within the legal review period," and stressed, "It is time not just to confirm each side's position, but to earnestly seek common ground and close the gap in opinions." In previous meetings, labor had proposed an hourly wage of 12,000 won, while management called for a freeze, resulting in a difference of 1,680 won. Considering the final deadline for announcing next year's minimum wage is August 5, the Minimum Wage Commission must submit the proposal to the Ministry of Employment and Labor by mid-July at the latest.

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