Night of the 12th to early morning of the 13th likely to decide next year's minimum wage... Final negotiation between Noh and Sae

9th Full Meeting of Minimum Wage Commission at Government Sejong Complex on 12th at 3 PM
Chairman Park Junsik: "Will Request Multiple Amendments Over Long Period"
Minnocho: "Moon Administration's Pledge of 10,000 Won Minimum Wage Dashed" Strong Criticism
Kyunghyong: "Small Business Owners and Self-Employed Already in Survival Mode Due to COVID-19"

On the afternoon of the 12th, at the 9th plenary meeting held in the Minimum Wage Commission meeting room at the Government Sejong Complex, Ryu Ki-jung, Executive Director of the Korea Employers Federation (left), a user committee member, and Lee Dong-ho, Secretary General of the Federation of Korean Trade Unions (FKTU), a labor committee member, are seen deep in thought. It is widely expected that an overnight meeting and intense debates lie ahead before a resolution is reached. (Image source=Yonhap News)

[Sejong=Asia Economy Reporter Moon Chaeseok] On the afternoon of the 12th, as the decision on next year's minimum wage approached, labor and management entered the final tug-of-war. The gap to be narrowed is 1,700 won (hourly basis: labor side 10,440 won - management side 8,740 won). It is highly likely that overnight negotiations will continue this year as well, and Chairman Park Junsik hinted at this. In his opening remarks at the 9th meeting, Chairman Park stated, "Today, we plan to request both labor and management sides to submit revised proposals several times over a long period."

The Minimum Wage Commission, a social dialogue body that deliberates and decides on the minimum wage, held its 9th plenary meeting from 3 p.m. at the Government Complex Sejong to continue deliberations on next year's minimum wage. The commission is expected to attempt to decide on next year's minimum wage as early as tonight. If no conclusion is reached tonight, it is highly likely that the 10th plenary meeting will be held in the early morning of the 13th to make a decision.

Following Chairman Park's request, both labor and management sides must submit their second revised proposals for next year's minimum wage at this meeting. Unless the 1,700 won gap is significantly reduced in the second revised proposals, Chairman Park may present a 'deliberation facilitation range' and request a third revised proposal within that range. The deliberation facilitation range reflects the basic views of the nine public interest commissioners and is expected to have a significant impact on the deliberations. Public interest commissioners play the most meaningful decision-making role between the nine labor commissioners and nine employer commissioners, who have clear disagreements.

However, it is difficult to conclude that a decision will be made solely based on the deliberation facilitation range. If either labor or management is dissatisfied with the deliberation facilitation range and walks out, normal deliberations may become difficult. For example, in last year's negotiations, which concluded at 8,720 won, the public interest commissioners proposed a deliberation facilitation range of 8,620 won to 9,110 won, but the gap between the two sides did not narrow at all. The public interest commissioners then proposed a 1.5% increase again, which led to labor commissioners protesting and walking out. Subsequently, only nine public interest commissioners and seven employer commissioners voted, and the proposal was approved with a 9-7 vote.

Until the opening remarks of the 9th meeting, labor and management ran parallel lines, presenting their grounds as in the 1st to 8th meetings. Park Hee-eun, vice-chair of the Korean Confederation of Trade Unions (KCTU) and a labor commissioner, strongly criticized, saying, "In the field, there are even remarks that the current government's pledge of a 10,000 won minimum wage has become the biggest broken promise of the Moon Jae-in administration."

Lee Dong-ho, secretary-general of the Federation of Korean Trade Unions (FKTU), also explained that the management side's first revised proposal (a 0.2% increase from this year) translates to about 4,000 won more per month than this year. Lee asked rhetorically, "What can you do with an extra 4,000 won a month?" He added, "The government's projected economic growth rate this year is 4.2%, and the inflation rate is 1.8%. Labor commissioners find it hard to hide their frustration at the employer commissioners' revised proposals, which do not reflect economic forecasts."

Employer commissioners continued to argue how small business owners and self-employed people, hit hard by COVID-19, could handle a sharply increased minimum wage. Ryu Ki-jung, executive director of the Korea Employers Federation (KEF), expressed concern, saying, "For small business owners and self-employed people, survival itself is the goal due to the COVID-19 crisis. If the minimum wage rises again, the situation will worsen to an unbearable level."

Lee Tae-hee, head of the Smart Job Division at the Korea Federation of SMEs, also warned, "If wages are raised indiscriminately without considering the paying side's ability, the result is clear. A significant number of small and medium-sized enterprises will close, and if they cannot afford it, they will have no choice but to violate the law."

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