Members of the Minimum Wage Commission are in recess at the government complex in the central city of Sejong on July 19, 2023. (Yonhap)
SEJONG, July 19 (Korea Bizwire) — Next year’s hourly minimum wage was set at 9,860 won (US$7.80) Wednesday, an increase of 2.5 percent from this year.
The Minimum Wage Commission, composed of 27 members, nine each representing public interest, business and labor, reached the decision in a meeting that started Tuesday and continued through early Wednesday in the central city of Sejong.
The new minimum wage for 2024 is 240 won higher than this year’s 9,620 won and translates into a monthly wage of nearly 2.07 million won.
The commission determined the minimum wage level in a vote as the labor and business sides remained sharply divided and were unable to reach a decision through agreement.
The labor side had initially proposed 12,210 won as the 2024 minimum wage, a 26.9 percent increase from this year’s 9,620 won, citing rising inflation, while the business side had suggested a freeze.
A key point of attention had been whether the 2024 minimum wage would surpass the 10,000 won threshold for the first time, but the decision fell short of the mark.
This year’s minimum wage negotiations will go down as the longest since the current wage determination system was introduced in 2007.
The commission took 110 days to set the minimum wage this year after the labor minister made an official request on March 31 for the commission’s review of next year’s minimum wage.
The previous record was in 2016, when the commission took 108 days.
The minimum wage rose by 10.9 percent to 8,350 won in 2019, 2.87 percent to 8,590 won in 2020, 1.5 percent to 8,720 won in 2021, 5.05 percent to 9,160 won in 2022 and 5 percent to 9,620 won this year.
By law, the commission is required to present the new minimum wage to the labor minister, who is then required to announce it publicly.
Both sides can object to the agreement and, subject to the minister’s approval, request a reevaluation by the commission. However, a reevaluation has never occurred since the minimum wage system was introduced in 1988.
The new wage, if finalized, will take effect Jan. 1, 2024.
Members of the Korean Confederation of Trade Unions hold up signs calling for a hike in the minimum wage during a rally in Seoul on June 24, 2023. (Yonhap)
The labor-side members denounced the committee decision as tantamount to a wage cut, given the high inflation, and chanted slogans, such as “Down with the Minimum Wage Commission and shoddy wage increase,” before leaving the conference room.
“Under the current circumstance where a wage hike practically equals a wage freeze (due to high inflation), those who suffer the most are the underprivileged working on low incomes,” Ryu Ki-seop, a senior official at the Federation of Korean Trade Unions, told reporters.
The minimum wage decision was also protested by an association of small business owners, which expressed “strong regrets” that their demand for a freeze was not adopted.
“The latest minimum wage increase decision would clearly result in a sharp plunge in jobs for workers by speeding up small business owners’ decision to (lay off and) work alone,” the Korea Federation of Micro Enterprise said in a release.
(Yonhap)
