Minimum Wage Commission holds 11th plenary session

Labor calls for cost-of-living reflection; business cites small firms' limits

Gap between sides unchanged; session recessed ahead of third revised proposals

Documents recording the revised proposals submitted separately by worker and employer representatives sit at the seat of Minimum Wage Commission Chairman Kwon Sun-won during the 11th plenary session held Thursday at the Government Sejong Complex. At the 10th session, labor proposed 11,900 won ($8) per hour and management proposed 10,360 won as their second revised figures, leaving a gap of 1,540 won. [Yonhap]
Documents recording the revised proposals submitted separately by worker and employer representatives sit at the seat of Minimum Wage Commission Chairman Kwon Sun-won during the 11th plenary session held Thursday at the Government Sejong Complex. At the 10th session, labor proposed 11,900 won ($8) per hour and management proposed 10,360 won as their second revised figures, leaving a gap of 1,540 won. [Yonhap]

Labor and management clashed again over living costs and employers' ability to pay at the Minimum Wage Commission's 11th plenary session, convened to set next year's minimum wage.

Worker representatives called for a raise reflecting inflation and actual living expenses, while business groups opposed a large increase, citing difficult operating conditions facing small businesses and small and medium-sized enterprises.

Commission Chairman Kwon Sun-won opened the session Thursday at the Government Sejong Complex, saying he was sorry the panel had again missed its deliberation deadline. "All members — labor, management and public interest — are engaging in more serious and in-depth discussions than ever before," he said. "We will work to reach the most appropriate level."

The commission immediately recessed, however, scheduling a resumption at 3:50 p.m. to receive third revised proposals from both sides. At the previous 10th session, labor had proposed 11,900 won ($8) per hour and management 10,360 won as their second revised figures, narrowing the gap to 1,540 won.

Minimum wage deliberations proceed through successive rounds of revised proposals from each side, gradually closing the gap. If no agreement is reached, public interest members may propose a "deliberation facilitation range" to encourage compromise, or the commission may ultimately put the figure to a vote.

Labor representatives argued Thursday that the actual living costs of low-wage workers should take priority over the "60 percent of median wage" benchmark commonly used in minimum wage discussions.

Ryu Ki-seop, secretary-general of the Federation of Korean Trade Unions, said relying too heavily on the 60-percent-of-median-wage indicator rather than workers' real living costs "contains a fundamental problem."

Ryu also took issue with the government's method of calculating wage statistics. "The median wage figures that the government and Statistics Korea provide to the OECD are calculated excluding performance pay and bonuses," he said. "Deliberately withholding total compensation data that is readily available could invite suspicion of intentional distortion aimed at making the minimum wage ratio appear relatively high."

"The minimum wage has barely kept pace with inflation, while the burden of living costs keeps growing," he added. "The minimum wage is not a 'minimum cost' — it is a wage that gives workers hope they can sustain their lives. This year calls for a bold, forward-looking increase, not a marginal adjustment."

Lee Mi-seon, vice chairwoman of the Korean Confederation of Trade Unions, also called for an inflation-based increase. "The starting point for discussions on the 2027 minimum wage must be the rate of inflation," she said. "The first step toward narrowing the gap between labor and management must begin above the 2.7 percent inflation rate announced by the Bank of Korea if the public is to accept the outcome."

She added that workers had not fully benefited from minimum wage increases over the past eight years due to the expansion of the wage calculation scope. "Contrary to talk of a '10,000-won minimum wage era,' the minimum wage is becoming the maximum wage for youth," she said.

Business groups, by contrast, urged restraint, citing the economic slowdown and small business owners' limited ability to pay.

Ryu Ki-jung, executive managing director of the Korea Employers Federation, said the reality facing small and medium-sized enterprises and small business owners was "very serious," masked by what he called the illusion of a semiconductor boom. "Business closures are approaching 1 million, and the outstanding loan balance and delinquency levels among the self-employed are at all-time highs," he said.

He said applying labor's second revised proposal would raise actual labor costs — including weekly holiday pay — by about 5 million won ($3,255) per worker per year. "Even for employers with just a few workers, that adds tens of millions of won in annual costs, which is simply unmanageable for small business owners and small and medium-sized enterprises already at the edge," he said.

Yang Ok-seok, a director at the Korea Federation of Small and Medium Enterprises, said the situation on the ground was so dire that some were calling for a cut in the minimum wage. "Labor costs are the first thing businesses cut when times get hard, so the cumulative burden of minimum wage increases must be factored in," he said.

"There are also workers telling us not to raise the minimum wage any further," Yang added. "Please also listen to the voices of those on the ground who fear losing their jobs."

Seong Jae-min, the public interest members' secretary, said the two sides had submitted two rounds of revised proposals but still held significantly different positions. "I hope this session will be one where we think together about our social responsibilities and meaningfully expand common ground toward a responsible conclusion," he said.


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