FKI "Growth Rate in the 1% Range but Minimum Wage Rises Again... Concerns Over Employment for Vulnerable Groups"

Choo Kwang-ho, Head of Economic and Industrial Headquarters
Comments on the 2024 Minimum Wage Decision

The Federation of Korean Industries (FKI) expressed concern on the 19th over the Minimum Wage Commission's decision to raise next year's minimum wage by 2.5% compared to this year.

The Minimum Wage Commission set next year's minimum wage at 9,860 KRW per hour and 2,060,740 KRW per month (based on 209 hours). This is a 2.5% increase from this year's 9,620 KRW per hour (2,010,580 KRW per month).

The FKI issued a statement under the name of Choo Kwang-ho, Head of the Economic and Industrial Headquarters, saying that the increased labor cost burden on companies will lead to employment contraction.

Professor Kwon Soon-won, public interest member and secretary of the Minimum Wage Commission, is seen speaking about the voting results in the meeting room of the Minimum Wage Commission at the Government Complex Sejong in Sejong City in the early morning of the 19th.
[Photo by Yonhap News]

The FKI stated, "This year, the Korean economy is expected to experience low growth in the low to mid 1% range due to the impact of sluggish exports caused by the global economic downturn," adding, "Companies and numerous self-employed individuals are facing significant difficulties due to weak domestic demand and inventory accumulation."

It continued, "Small-scale micro-enterprises and self-employed individuals are likely to face increased management difficulties due to the additional labor cost burden from this minimum wage increase," and added, "There are concerns that vulnerable groups such as youth and low-income earners, who are heavily affected by the minimum wage, will experience negative impacts on their employment."

The FKI also emphasized the need to change the minimum wage decision-making system. It stated, "To reasonably determine the minimum wage, we hope that measures reflecting reality, such as considering productivity and employers' ability to pay, and applying differentiated rates by industry, will be promptly prepared."

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