"Driven to Closure" vs "Open a Lifeline"...Minimum Wage Gap Stands at 990 Won (Comprehensive)

12th Plenary Meeting of the Minimum Wage Commission Held on the 7th

As the 2027 minimum wage negotiations near their final stage, a fierce tug-of-war continues between labor and management. Despite multiple revised proposals being submitted, the gap remains significant at 990 won. The management side has countered the labor side’s argument that the minimum wage should reflect the inflation rate by stating, "Producer prices have risen at twice the rate of consumer prices, so if the minimum wage is also raised, business owners will inevitably be driven to closure." In response, the labor side insisted, "Raising the minimum wage is a desperate plea to open up a lifeline," demanding an increase.

The 11th plenary meeting is being held on the 7th at the Minimum Wage Commission in the Government Complex Sejong. Photo by Yonhap News Agency

The Minimum Wage Commission held its 12th plenary meeting at the Government Complex Sejong on the afternoon of the 7th, continuing discussions over the rate of increase for next year’s minimum wage. At this meeting, both sides submitted their sixth revised proposals. Labor proposed 11,450 won, a 10.9% increase from this year’s minimum wage, while management suggested 10,460 won, an increase of 1.4% from this year.

The management side argued that there have already been cases where the minimum wage rose at a higher rate than inflation, which has placed a heavy burden on business owners. Ryu Kijeong, Executive Managing Director of the Korea Employers Federation, emphasized, "The labor representatives keep stressing that the inflation rate should be the starting point for minimum wage deliberations, but over the past ten years, the minimum wage has risen by 79.7%, whereas the consumer price index rose by 22.9%. The minimum wage has increased approximately 3.5 times faster," highlighting the growing burden on business owners. He added, "Rising prices are already putting a greater strain on business owners, and if the minimum wage is raised again, workplaces will be left with no option but to face closure or job cuts."

There were also voices warning against determining an excessive increase under the pressure of the looming deadline. According to the Labor Standards Act, the Minister of Employment and Labor must officially announce the minimum wage by August 5. As a result, 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 Human Resources Policy at the Korea Federation of SMEs, stressed, "Although the statutory deadline for this year’s minimum wage review has passed, the decision should not be made under time pressure at a level that small and micro businesses cannot bear." He added, "Raising the minimum wage will distort the wage system in the labor market, weaken the competitiveness of small and micro businesses, encourage splitting work into less than 15-hour segments, and lead to job losses, causing structural harm to the entire industry."

The labor side argued that the minimum wage must be significantly increased to reduce labor market inequality and stimulate domestic demand. Ryu Giseop, Secretary-General of the Federation of Korean Trade Unions, pointed out, "While semiconductor conglomerates are growing, wage gaps and income inequality are deepening at the lower end of the labor market, with the very right to survive under threat." He noted, "The minimum wage will not only affect workers’ livelihoods but will also have a considerable impact on the pace of domestic economic recovery." Secretary-General Ryu also stressed, however, that "for the minimum wage increase to truly boost domestic demand, support for small and micro businesses must be provided in parallel."

Lee Miseon, Vice President of the Korean Confederation of Trade Unions (KCTU), criticized the public interest members of the Minimum Wage Commission, saying, "While you say ‘let’s try to bridge the gap,’ you are only pressuring the labor side and discussing a freeze or a minimal increase of just a few dozen won, not targeting management." She continued, "What the public interest members call a rational formula is actually devaluing the work of low-wage workers and pushing them into isolated lives," urging for a substantial increase in the minimum wage.

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