SEOUL, July 3 (AJP) - South Korea’s Minimum Wage Commission is holding its ninth plenary session at the government complex in Sejong on Thursday to finalize next year’s minimum wage. A final decision could come as early as Thursday night or early Friday morning.
The labor side initially demanded a 14.7 percent increase from this year’s hourly wage of 10,030 won ($7.38), proposing 11,500 won. However, it revised its demand down to 11,260 won two days ago during the previous session of negotiation.
The business side, which had called for a freeze, raised its offer to 10,110 won. While the gap between the two sides has narrowed from 1,470 won to 1,150 won, no agreement has been reached yet.
Labor representatives argue that a significant increase is necessary to ensure a basic standard of living. “With such a low rate of minimum wage increase, it’s hard to guarantee the livelihoods of workers or stimulate domestic consumption,” said Ryu Ki-seop, secretary general of the Federation of South Korean Trade Unions, during the previous session.
In contrast, the business side insists that the current minimum wage is already too high and could burden small business owners. “The minimum wage directly affects not only the labor market but the entire economy. It must be decided very carefully,” said Ryu Gi-jeong, executive director of the South Korea Enterprises Federation. “Next year’s minimum wage should be based on what those who already struggle to meet current standards can afford,” he added.
If the two sides fail to reach an agreement, public interest commissioners, composed of labor experts and academics, are expected to present a mediation proposal with suggested upper and lower limits. The commission must submit its proposal to the Ministry of Employment and Labor by mid-July. A minister should fix the minimum wage by August 5.
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