Minimum wage panel calls for revised proposals as labor, management set to negotiate Tuesday

Negotiations over next year's minimum wage have entered a full-fledged adjustment phase. The Minimum Wage Commission has asked both labor and management to submit their first revised proposals at the 10th plenary session, scheduled for Tuesday. The central question is how much the two sides will narrow a 1,680-won gap between labor's demand of 12,000 won ($8) per hour and management's call for a freeze at the current rate.

According to the Minimum Wage Commission, Thursday's ninth plenary session at the Government Sejong Complex marked the start of substantive discussions on next year's minimum wage level. At the preceding eighth session, labor put forward an initial demand of 12,000 won per hour — a 16.3 percent increase from this year — while the employer side proposed maintaining the current rate of 10,320 won.

In opening remarks Thursday, labor representatives stressed the cost-of-living burden on low-wage workers, while management representatives cited the limited payment capacity of small businesses, with both sides reaffirming their existing positions.

Korean Federation of Trade Unions Secretary-General Ryu Gi-seop criticized the employer side, saying the push for a freeze or cut had "in effect repeated for nearly 20 years since 2007" and amounted to "ignoring the lives of minimum wage workers."

Ryu said the actual monthly living cost for a single unmarried worker this year stands at around 2.82 million won ($1,836), while the monthly equivalent of the minimum wage is only about 2.15 million won — leaving a gap of roughly 670,000 won. "The minimum wage is a system designed to stabilize the livelihoods of low-wage workers," he said. "A meaningful increase is needed so it can serve as a catalyst for restoring people's livelihoods."

Korean Confederation of Trade Unions Vice Chairwoman Lee Mi-seon grew emotional during her opening remarks. "The 12,000-won minimum wage that labor is demanding is not money for luxuries or savings — it is the cost of survival for a minimally dignified life," she said. "A minimum wage increase is the starting point for workers and the self-employed to live together."

Employer representatives, meanwhile, continued to press for a freeze, citing a deteriorating business environment.

Korea Employers Federation Executive Vice President Ryu Gi-jeong said more than half of small and medium-sized enterprises cannot cover even their interest expenses with operating profit. "If the minimum wage burden grows further at a time when self-employed debt has reached a record high, small businesses and micro-enterprises will no longer be able to hold on," he said.

Korea Federation of SMEs human resources policy chief Yang Ok-seok also urged a freeze, saying, "If businesses close, there will be no jobs and no minimum wage." He cited a federation survey in which 77.6 percent of respondent companies said the current minimum wage level was a burden on management, and 62.6 percent said next year's rate should be frozen or reduced.

Seong Jae-min, vice president of the Korea Labor Institute and a public interest commissioner, said Thursday's session "should serve as a starting point for closely examining each side's reasoning based on the legal criteria for setting the minimum wage and narrowing the gap."

During a closed-door session, labor and management exchanged views but did not submit any revised proposals. Commission Chair Kwon Sun-won asked both sides at the close of the meeting to "submit more advanced revised proposals at the next plenary session."

Both sides agreed to submit their first revised proposals at the opening of the 10th plenary session on Tuesday.