Labor proposes 12,000 won per hour, a 16.3% increase; employers say current level already a burden

Initial gap between the two sides stands at 1,680 won as negotiations begin in earnest

The Minimum Wage Commission holds its eighth plenary session at the Government Sejong Building on Tuesday to begin deliberations on next year's minimum wage level. Yang Ok-seok, head of human resources policy at the Korea Federation of Small and Medium Business (from left), Ryu Ki-jeong, executive vice president of the Korea Employers Federation, Ryu Ki-seop, secretary-general of the Federation of Korean Trade Unions, and Lee Mi-seon, vice chairwoman of the Korean Confederation of Trade Unions, display opposing placards. [Yonhap]
The Minimum Wage Commission holds its eighth plenary session at the Government Sejong Building on Tuesday to begin deliberations on next year's minimum wage level. Yang Ok-seok, head of human resources policy at the Korea Federation of Small and Medium Business (from left), Ryu Ki-jeong, executive vice president of the Korea Employers Federation, Ryu Ki-seop, secretary-general of the Federation of Korean Trade Unions, and Lee Mi-seon, vice chairwoman of the Korean Confederation of Trade Unions, display opposing placards. [Yonhap]

Deliberations on next year's minimum wage kicked off in earnest Tuesday, with labor calling for 12,000 won per hour and employers proposing a freeze — setting the two sides on a collision course from the outset.

Labor cited high inflation and the cost-of-living burden as grounds for a sharp increase, while employers argued that South Korea's minimum wage has already reached an internationally high level and that businesses have hit the limit of what they can afford to pay.

The Minimum Wage Commission convened its eighth plenary session at the Government Sejong Building on Tuesday to begin reviewing the minimum wage to take effect in 2027. All 27 commissioners attended — nine each representing workers, employers and the public interest.

Labor submitted 12,000 won per hour as its opening proposal, a rise of 1,680 won, or 16.3 percent, from this year's minimum wage of 10,320 won. The monthly equivalent would be 2,508,000 won.

Employers countered by submitting 10,320 won — the current rate — as their opening figure, calling for no change. The gap between the two sides' initial proposals stands at 1,680 won per hour.

Tensions flared from the moment the session opened. Labor commissioners displayed placards reading "Raise it, raise it — minimum wage to 12,000 won," "Kospi at 10,000 or minimum wage at 12,000 won," "Everything has gone up except wages — raise the minimum wage," and "Reflect household living costs and guarantee real wages."

Ryu Ki-jeong, executive vice president of the Korea Employers Federation, said in his opening remarks that it was "deeply regrettable" that industry-specific differentiation of the minimum wage had once again failed to materialize. "Since we must set a single minimum wage that every workplace must comply with regardless of sector, the standard should be set with the most struggling industries and smallest businesses in mind," he said.

Ryu said the minimum wage had risen 79.7 percent over the past decade, far outpacing nominal wage growth of 39.6 percent and consumer price growth of 22.9 percent over the same period. The minimum wage now stands at 62.2 percent of the median wage, he added, exceeding the 60 percent threshold widely cited internationally as an appropriate ceiling.

He said the share of workers earning below the minimum wage reached 12.4 percent last year, with the figure already surpassing 30 percent in the accommodation and food service sector and at workplaces with fewer than five employees. "Some industries and small businesses are already finding it difficult to comply with the current minimum wage," he said.

Ryu also cited a survey by the Korea Federation of Micro Enterprises showing that 87 percent of small business owners said they felt a heavy burden paying the current minimum wage, and 98.5 percent said next year's rate should be cut or frozen. "We must fully take into account the reality that the minimum wage is already high and that workplaces have reached the limit of what they can absorb," he said.

Yang Ok-seok, head of human resources policy at the Korea Federation of Small and Medium Business, said raising the minimum wage beyond labor productivity growth would destroy jobs and accelerate the adoption of kiosks, unmanned systems and AI automation. "It could also dampen investment and R&D at small and medium-sized enterprises and lead to a proliferation of ultra-short-hour employment arrangements," he said.

Labor pushed back, arguing that a substantial increase was needed to address the cost-of-living pressures facing low-wage workers and the erosion of real wages.

Ryu Ki-seop, secretary-general of the Federation of Korean Trade Unions, said the Minimum Wage Act requires that workers' living costs be the top priority. "We are living through a cost-of-living crisis brought on by the polarization of the labor market," he said.

Ryu said that while the economic growth outlook was being revised upward on the back of strong semiconductor exports, the gains were not reaching low-wage workers. "The demand for 12,000 won is meant to offset the decline in real wages caused by high inflation and high oil prices, and to stabilize the livelihoods of vulnerable workers," he said.

Lee Mi-seon, vice chairwoman of the Korean Confederation of Trade Unions, said the current monthly minimum wage equivalent of 2,156,880 won was not enough to cope with soaring prices and utility costs. "Workers' wallets need to open before small businesses and the self-employed can recover," she said.

Seong Jae-min, a public interest commissioner, said the minimum wage was an important matter that must weigh workers' living costs, wages of comparable workers, labor productivity and income distribution together. "Discussion grounded in objective data and facts is more important than anything else," he said.


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