"Driven to Closure" vs "A Desperate Plea for Survival"... Final Minimum Wage Talks Remain Deadlocked

12th Plenary Session of the Minimum Wage Commission Held on July 7

Although the 2027 minimum wage negotiations have reached their final stage, a tense standoff between labor and management continues. The management side has countered the workers' argument that the minimum wage should be set in line with the inflation rate, stating, "The producer price index is twice as high as the consumer price index. If the minimum wage also rises, businesses will inevitably be forced to close." In response, the labor side has demanded an increase, saying, "Raising the minimum wage is a desperate plea for a lifeline."

Yonhap News Agency

The Minimum Wage Commission held its 12th plenary session at the Sejong Government Complex on the afternoon of July 7, 2026, continuing discussions on the rate of increase for next year’s minimum wage. The current gap between proposals from labor and management is 1,290 won, narrowed from an initial difference of 1,680 won by 390 won. However, as the legal review deadline has already passed and the gap remains considerable, there is a possibility that the public interest commissioners may propose a ‘review facilitation range’ at today’s meeting.

The management side argued that increases in the minimum wage have outpaced inflation in the past, already imposing significant burdens on business owners. Ryu Kijeong, Executive Managing Director of the Korea Employers Federation, said, "Labor commissioners keep insisting that the inflation rate should be the starting point for the minimum wage review. However, over the past 10 years, the minimum wage has risen by 79.7%, while consumer prices have increased by 22.9% in the same period. The minimum wage has risen about 3.5 times faster," emphasizing the growing burden for business owners. He added, "Rising prices are already a significant burden for business owners. If the minimum wage is increased again, workplaces will inevitably be driven to closures and employment adjustments."

There were also voices warning that an excessive increase should not be decided under pressure from deadlines. According to the Labor Standards Act, the Minister of Employment and Labor must officially announce the minimum wage by August 5. Therefore, the Minimum Wage Commission must decide on the minimum wage by mid-July. Last year, the minimum wage for 2026 was finalized at around 11:30 p.m. on July 10. Yang Okseok, Head of the Workforce Policy Division at the Korea Federation of SMEs, stressed, "Although the statutory deadline for this year’s minimum wage review has passed, we should not let the pressure of time force us into a decision that small and medium-sized businesses and self-employed individuals cannot handle." He added, "A minimum wage increase will distort the wage structure in the labor market, weaken the competitiveness of small and medium-sized enterprises and self-employed businesses, encourage an increase in split shifts of less than 15 hours, and ultimately result in job losses, causing structural harm to our entire industry."

The labor side argued that a significant increase in the minimum wage is needed to reduce labor market inequality and boost domestic demand. Ryu Giseop, Secretary-General of the Federation of Korean Trade Unions, pointed out, "While semiconductor conglomerates are growing, wage gaps and income inequalities are worsening at the lower end of the labor market, and workers' very right to survive is threatened. The minimum wage will not only affect workers' livelihoods but also have a considerable impact on the pace of domestic demand recovery." However, Secretary-General Ryu added, "For a minimum wage increase to actually stimulate domestic demand, support for small and micro businesses must be provided in parallel."

Imi Seon, Vice President of the Korean Confederation of Trade Unions, criticized the public interest commissioners of the Minimum Wage Commission, saying, "While you talk about 'narrowing the gap,' you are not pressuring the management, who only talk about frozen wages or increases of just a few dozen won, but are instead pressuring the labor side." She continued, "What the public interest commissioners call a reasonable formula actually devalues the work of low-wage workers and drives them into isolated lives. The minimum wage needs to be raised significantly," she urged.

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