It's a Minimum Wage Research Project... Labor Unions Oppose the 'Business Survey'

Choeimwi to Conduct Survey on Minimum Wage Increase Response and Difficulties Among Businesses
Labor Sector Expresses Concern Over Employers' Payment Ability Being Used as Minimum Wage Determination Criterion
Preliminary Battle Already Underway Ahead of 2022 Minimum Wage Deliberations

[Image source=Yonhap News]

[Asia Economy Reporter Kim Bo-kyung] The Federation of Korean Trade Unions (FKTU) officially demanded on the 13th that the Minimum Wage Commission halt the 'Business Status Survey' it is currently promoting. This demand stems from the judgment that the survey results could negatively affect the labor sector during next year's minimum wage deliberations. The Minimum Wage Commission responded by stating, "This is a research project planned since early this year," and added, "We cannot stop the research just because there are differing opinions."

On the same day, the FKTU submitted a protest letter to the Secretariat of the Minimum Wage Commission at the Government Complex Sejong, urging the suspension of the policy research project planned for the second half of this year. The FKTU claimed, "Since the formal written opinion collection, there has been no consultation with the labor sector," and argued, "The unilateral notification from the Secretariat goes against the decision-making process of the social dialogue body." They further stated, "The business status survey for minimum wage-applicable workplaces could lead to a mistaken interpretation that 'the employer's payment capacity' should be a criterion for determining the minimum wage," and demanded, "The research project for the second half of the year must be stopped."

The Minimum Wage Commission's research projects planned for the second half of this year include four topics: ▲Improvement plans for wage status analysis for minimum wage deliberations (30 million KRW), ▲Business status survey of minimum wage-applicable workplaces (55 million KRW), ▲Improvement plans for the effectiveness survey of minimum wage application (44 million KRW), and ▲Discovery of minimum wage-related data and establishment of a management system (40 million KRW), totaling 170 million KRW.

Among these, the labor sector is raising concerns about the business status survey of minimum wage-applicable workplaces. The purpose is to investigate how the annually increasing minimum wage actually affects business management through a status survey. This is the first time such a research project is being conducted. A Secretariat official of the Minimum Wage Commission explained, "The public interest members suggested the need to understand how workplaces respond to minimum wage increases and what difficulties they face, which led to the start of this research." He added, "Since a contract with a research institution has already been signed and the project is underway, stopping it now could cause bigger problems such as contract termination."

[Image source=Yonhap News]

Next year's minimum wage is set at 8,720 KRW, a 1.5% (130 KRW) increase from this year, marking the lowest rate of increase in history. From the labor sector's perspective, there is a need to significantly raise the minimum wage level compared to 2022. This is also why they are obstructing the Minimum Wage Commission's research projects. A FKTU official said, "Depending on the research results, there is a risk that the employer's payment capacity could be used as a criterion for determining the minimum wage," expressing concerns that "the minimum wage-related system could be worsened."

Despite labor opposition, the Minimum Wage Commission plans to proceed with the research projects. There is also a consensus that the limitations of previous basic research related to minimum wage determination criteria, such as workers' living expenses and income distribution ratios, need to be overcome. This year, the Minimum Wage Commission's budget increased by about 600 million KRW compared to the previous year, citing reasons such as strengthening expertise. Minister of Employment and Labor Lee Jae-gap also stated in an interview with Asia Economy regarding the minimum wage deliberation process, "It is necessary to sufficiently consider various economic and social indicators," and added, "Rather than exchanging proposals like labor and management wage negotiations, it is necessary to discuss what level is appropriate based on data." This implies the need to determine the minimum wage level based on diverse and objective data rather than negotiation methods between labor and management.

A Minimum Wage Commission official said, "The budget for conducting new research was allocated with the intention of strengthening expertise," and added, "While there may be pros and cons depending on perspectives, necessary research cannot be stopped just because of differing opinions." Regarding whether the research results will influence the minimum wage deliberations, the official stated, "Whether labor, management, and public interest members will use the data during the minimum wage deliberation process will be decided through future consultations," and emphasized, "While the data will be secured, it is difficult to assert that it will be reflected in the deliberations. It is up to the members to decide."

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