Labor and Management Submit Minimum Wage Revision Proposals... Labor 12,130 Won vs Management 9,650 Won

Labor side 0.7% ↓·Management side 0.3% ↑
Gap remains... Possibility of revision again

On the 4th, both labor and management presented revised proposals regarding the minimum wage level to be applied next year. However, since the minimum wage levels proposed in the revisions by both parties do not differ significantly from their initial demands, it is expected to take time to find a consensus.

[Image source=Yonhap News]

Before the 10th plenary meeting of the Minimum Wage Commission held at the Government Complex Sejong in the afternoon, labor and management had prepared their revised minimum wage proposals for the coming year.

Labor, which had previously demanded an hourly wage of 12,210 won, a 26.9% increase from this year citing reasons such as revitalizing domestic consumption, resolving wage inequality, and offsetting real wage declines, submitted a revised proposal of 12,130 won per hour. When converted to a monthly salary (based on 209 working hours per month), this amounts to 2,535,170 won. This is 26.1% higher than this year's minimum wage of 9,620 won per hour and 2,010,580 won per month, but 0.7% lower than their initial demand.

This figure is based on the average monthly subsistence cost for single, unmarried workers, which is used as fundamental data when determining the minimum wage level, calculated at 11,537 won per hour and 2,411,320 won per month, plus the projected inflation rate.

On the other hand, management, arguing that the minimum wage should be frozen due to the wage payment capacity of small businesses, labor productivity growth rates that do not meet the minimum wage increase rate, and unclear effects on income distribution improvement, submitted a revised proposal of 9,650 won per hour and 2,016,850 won per month. This is 0.3% higher than their initial demand. The employer representatives explained that the revised proposal is a manageable level from the perspective of small businesses and self-employed individuals.

Despite the initially large gap in positions, the Minimum Wage Commission is likely to request further revised proposals from both labor and management, who have not backed down in their revisions.

Discussions on the minimum wage level proceed by finding common ground based on the initial demands submitted by labor and management. If no agreement is reached, the minimum wage level may be determined within the 'deliberation facilitation range' proposed by the public interest commissioners. Last year, the minimum wage increase rate was finalized within this range by adding the projected economic growth rate and consumer price inflation rate, then subtracting the employment growth rate.

Although the Minimum Wage Commission has already exceeded the statutory deliberation deadline, considering the remaining administrative procedures, the minimum wage proposal must be submitted to the Minister of Employment and Labor by mid-July. The minister must finalize and announce the minimum wage by August 5.

Since the introduction of the minimum wage system in 1988, the statutory deadline has only been met nine times. Last year, it was met for the first time in eight years since 2014.

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