Next Year's Minimum Wage Rises by 380 Won to 10,700 Won, Affecting 2.97 Million Workers (Comprehensive 2nd Report)

14th Plenary at Government Complex Sejong on July 14
Decision Made by Vote for Employer Proposal
Labor Side: "Effectively a Freeze When Considering Inflation"

The minimum wage for next year has been set at 10,700 won per hour, a 380 won (3.7%) increase from this year.

The Minimum Wage Commission reached this decision at its 14th plenary meeting held at the Government Sejong Complex on the 14th. When the weekly holiday allowance is included, the hourly wage becomes 12,840 won, and the total monthly wage (based on 209 hours) amounts to 2,236,300 won. Previously, for the initial minimum wage proposal for next year, labor unions demanded 12,000 won (a 16.3% increase from this year), while the business community called for a freeze at 10,320 won. The estimated number of workers affected by next year's minimum wage is 660,000 (an impact rate of 3.8%) according to the Survey on Working Conditions by Type of Employment, and 2,978,000 (an impact rate of 13.3%) according to the Supplementary Survey on Economically Active Population.

Small business industry representatives held a rally on the 9th in front of National Assembly Station in Yeouido, Seoul, holding placards calling for the suspension of the "Basic Act on Working People" promotion and the differentiated application of the minimum wage, demanding a major shift in employment policy from the government and the National Assembly. Photo by Yonhap News Agency

After public interest members presented the 'deliberation facilitation range,' no agreement was reached and a vote was held: Employer proposal receives majority support

Both sides submitted a total of 12 revised proposals by the deadline, ultimately narrowing the gap to 130 won, but it was not enough to reach a consensus. In the end, the public interest members suggested a 'deliberation facilitation range' with a minimum of 10,600 won and a maximum of 10,860 won. The lower bound of 2.7% reflected this year’s projected consumer price inflation rate of 2.7%. The upper bound of 5.25% was derived by taking the average of the economic growth rate forecasts for this year by the Bank of Korea (2.6%) and the Korea Development Institute (2.5%), which is 2.55%, and adding the projected 2.7% consumer price inflation rate, which both institutions provided.

Nevertheless, as the gap between labor and management could not be bridged, the public interest members recommended that both sides agree on 10,720 won. However, no agreement was ultimately reached, and the minimum wage for next year was put to a vote. In the resulting vote among 27 representatives of labor, management, and public interest members, the employer side's proposal of 10,700 won received 15 votes, surpassing the labor representatives' proposal (11 votes), and was finalized as the minimum wage for 2027. The labor representatives' proposal was 10,730 won. There was one invalid vote.

Kwon Soonwon, Chair of the Minimum Wage Commission, is attending the 7th plenary meeting held at the Minimum Wage Commission of the Government Sejong Complex on the 18th. Photo by Yonhap News.

Both labor and management express disappointment: “Fails to reflect the desperate reality of low-wage workers” “Limits in payment ability for small businesses”

The labor representatives expressed considerable dissatisfaction with the minimum wage decision. Ryu Giseop, Secretary-General of the Federation of Korean Trade Unions, said, “A 3.7% increase in the minimum wage is a very disappointing decision that fails to adequately reflect the desperate living realities of low-wage workers,” and added, “If we consider rising prices, it is effectively a freeze.” He continued, “We deeply regret this minimum wage decision and will fight to secure the right to survival for low-wage workers and address the blind spots of the minimum wage system.”

The Korea Employers Federation, representing business circles, also expressed regret. The federation stated, “Given the difficult management environment and the limits of payment ability for small and medium-sized enterprises and small business owners, the minimum wage should have been frozen, and it is disappointing that this was not achieved.” However, they also explained, “This decision was the unavoidable result of much deliberation by the employer representatives, who sought to minimize management burden and employment contraction at the field level while still factoring in recent inflation trends.”

The Korea Federation of Micro Enterprises strongly objected, saying, “We regret the decision to approve another minimum wage increase while ignoring payment ability,” and added, “This increase will immediately raise labor cost burdens and intensify management difficulties, becoming a heavy shackle that bends our backs.”

Meanwhile, the commission, through a recommendation by public interest members, advised the Ministry of Employment and Labor to establish a task force in the second half of this year to promote institutional improvements. The commission recommended that the government comprehensively review and research aspects of the current minimum wage system, including its scope and determination criteria, and prepare an integrated improvement plan so it can be utilized in future minimum wage deliberations.

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