Labor and Management Clash Over 'Research on Sector-Specific Minimum Wage Application'

[Image source=Yonhap News]

[Asia Economy Reporter Eunmo Koo] Labor and management clashed head-on over whether to commission the government to conduct basic research necessary to decide on applying differentiated minimum wages by industry.

At the 5th plenary meeting of the Minimum Wage Commission held at the Government Complex Sejong on the afternoon of the 21st, labor and management committee members engaged in a heated debate regarding the research service on differentiated application by industry before discussing next year's minimum wage level.

Lee Dong-ho, Secretary General of the Federation of Korean Trade Unions (FKTU) and a labor committee member, stated, "Proposing the agenda for differentiated application by industry, which has already been concluded, as a means to appease employer organizations is a highly autocratic act," and expressed "serious concerns about such operation of the Minimum Wage Commission that deviates from precedent." He added, "I hope unnecessary discussions are avoided to comply with the remaining review deadline and that productive discussions begin," warning, "If the agenda for the research is forcibly submitted despite this earnest request, this year's review will inevitably face disruption."

Earlier, at the 4th plenary meeting on the 16th, the Minimum Wage Commission voted on whether to apply differentiated minimum wages by industry and decided to apply a single amount regardless of industry next year. The vote result was 16 against and 11 in favor. After this rejection, the public interest committee members proposed conducting research related to differentiated application by industry, and it was decided to continue the discussion at the 5th meeting.

Another labor committee member, Park Hee-eun, Vice Chairperson of the Korean Confederation of Trade Unions (KCTU), criticized Professor Kwon Soon-won of Sookmyung Women's University, the public interest committee secretary, for attending an economic policy direction meeting presided over by President Yoon Seok-yeol before the 4th plenary meeting. The implication was that Professor Kwon might have proposed the research service after attending the meeting where President Yoon advocated the necessity of differentiated application by industry.

In response, Professor Kwon rebutted, "I attended as a panelist upon request as an expert, and I have also attended several meetings during the Moon Jae-in administration where economic policy directions were prepared and discussed," adding, "There was no mention of minimum wage that day." He further explained, "The same controversy repeats every year, so I judged that it was time to settle the debate once and for all," and "The research was proposed to determine whether differentiated application is possible, and if not, why it is impossible, and whether the current industry classification is appropriate."

The management side argues for introducing differentiated minimum wage application, claiming that industries with insufficient wage-paying capacity, such as accommodation and food services, should have lower minimum wages. The labor side is concerned that after the research process, from 2024, the government or employer side's claims might prevail.

Employer committee members expressed regret over the rejection in the previous meeting and insisted that the research service agenda should be submitted as proposed by the public interest committee members. Ryu Ki-jung, Executive Director of the Korea Employers Federation (KEF), said, "At today's meeting, through a resolution procedure, the research service agenda must be adopted as a recommendation by the Minimum Wage Commission," and "I earnestly appeal for next year to be the inaugural year when differentiated application by industry is decided."

Lee Tae-hee, Head of the Smart Jobs Division at the Korea Federation of SMEs, said, "It is meaningful that public interest committee members proposed in-depth research related to differentiated application to the government," and added, "It would be good if it is handled by consensus, but if not, I hope for a vote."

The labor side presented an initial demand for next year's minimum wage at 10,890 KRW per hour. This is 1,730 KRW (18.9%) higher than this year's minimum wage (9,160 KRW). Before the plenary meeting, labor committee members held a press conference to disclose this demand, arguing that "a realistic increase in the minimum wage is necessary as a policy measure to prevent future inequality and polarization following the recent economic crisis of low growth and high inflation."

In response, Executive Director Ryu criticized, "This demand is utterly incomprehensible," stating, "In a situation where the 'triple hardship' of high inflation, high interest rates, and high exchange rates, along with the 'triple adverse factors' of declining production, consumption, and investment, are hitting all at once, demanding an 18.9% increase is tantamount to telling small and medium-sized enterprises and small business owners to shut down."

The management side plans to decide whether to present the initial minimum wage demand today after reviewing the discussion results related to the research service.

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