Business Community "Next Year's Minimum Wage Increase... Concerns Over Rising Labor Costs Burdening Marginal Firms"

The business community expressed concerns that the decision to raise the minimum wage next year would increase labor cost burdens on companies already struggling, such as small and micro enterprises. There were also calls for reform of the current minimum wage determination system, which is suspected to lack rationality.

On the morning of the 19th, the Minimum Wage Commission decided to raise the minimum wage for next year by 2.5% (240 won) from this year, setting the hourly wage at 9,860 won. The Korea Employers Federation (KEF), which participated as the employer representative on the Minimum Wage Commission, expressed regret for not being able to enforce their initial proposal to 'freeze' the wage.

Ryu Ki-jung, Executive Director of the Korea Employers Federation, said, "This decision was an unavoidable choice to minimize various side effects that would arise if the minimum wage were to be raised at a high rate again," adding, "We hope that an atmosphere of mutual understanding and consideration between micro and small enterprises, small business owners, and vulnerable workers will spread."

The 14th plenary meeting held on the afternoon of the 18th at the Minimum Wage Commission meeting room in the Government Complex Sejong, Sejong City
[Photo by Yonhap News]

The Federation of Korean Industries also expressed concern that labor cost burdens on micro enterprises would increase amid the current economic difficulties caused by sluggish exports. Choo Kwang-ho, Head of the Economic and Industrial Division at the Federation, said, "Not only micro enterprises and self-employed individuals but also vulnerable groups such as youth and low-income workers affected by the minimum wage will face negative impacts on their jobs."

The Korea Chamber of Commerce and Industry evaluated that the decision took into account the impact on the economy and jobs but predicted that the increasing management burden on small businesses and the self-employed would be inevitable. Kang Seok-gu, Head of the Research Division at the Korea Chamber of Commerce and Industry, emphasized, "We hope measures will be prepared so that small businesses and the self-employed can maintain jobs and enhance competitiveness."

The Korea International Trade Association, which is closely monitoring the situation of our export companies, expressed deep regret over the minimum wage decision. Jung Man-ki, Vice Chairman of the Korea International Trade Association, expressed concern, saying, "This will lead not only to a weakening of the competitiveness of our products but also to a reduction in new hires by companies, expansion of overseas investment, and downsizing of employment due to automation."

Furthermore, the business community unanimously called for reform of the current minimum wage determination system, which is difficult to reflect the realities faced by companies. Vice Chairman Jung pointed out, "There are several problems such as a lack of representativeness in the minimum wage decision process, failure to properly reflect reality, and disregard for regional differences in living costs."

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