Labor, management gap narrows to 1,410 won in third round of minimum wage talks

Negotiations between labor and management over next year's minimum wage continued Thursday, with both sides inching closer but still far apart.

At the 11th plenary session of the Minimum Wage Commission, labor and business each submitted their third revised proposals, making modest concessions but failing to close a gap that still stands at 1,410 won per hour.

Labor representatives pressed for a raise that reflects soaring living costs and inflation, while the business side argued that the ability to pay must come first, pointing to an era in which some 1 million small businesses have shut down.

The commission convened Thursday at the Government Sejong Building to receive and deliberate on the two sides' third revised proposals.

Labor proposed an hourly wage of 11,800 won ($8), down 200 won from its initial demand. That figure is 1,480 won, or 14.4 percent, above this year's minimum wage of 10,320 won. Management raised its offer by 70 won from its opening position to 10,390 won per hour — an increase of 70 won, or 0.7 percent, over the current rate.

The gap between the two sides narrowed by 130 won, from 1,540 won after the second round of revisions to 1,410 won. Both parties showed a willingness to find common ground, but the divide over the scale of any increase remained wide.

In opening remarks, labor representatives said the minimum wage must serve as a social safety net sustaining the livelihoods of low-wage workers.

Ryu Ki-seop, secretary-general of the Korean Confederation of Trade Unions, said over-reliance on a single benchmark — 60 percent of the median wage — rather than actual living costs was a fundamental problem. "The minimum wage is not a 'minimum cost' but a wage of hope that allows people to keep living their lives," he said, calling for a forward-looking and bold increase.

Ryu also raised concerns about the government's wage statistics methodology, saying the median wage figures that the government and Statistics Korea submit to the OECD exclude performance bonuses and other incentive pay.

Lee Mi-seon, vice chairwoman of the Korean Confederation of Trade Unions, said minimum wage discussions should start from the inflation rate. "Talks must begin above the 2.7 percent inflation rate announced by the Bank of Korea for the public to accept the outcome," she said. Lee added that the expansion of the wage inclusion scope had significantly offset the effect of past minimum wage increases and urged a recovery of real wages for low-income workers.

The business side cited the economic slowdown and the crisis facing self-employed workers as grounds for restraint.

Ryu Ki-jung, executive managing director of the Korea Employers Federation, said the difficult reality facing small and medium-sized enterprises and small business owners was being obscured by the illusion of a semiconductor boom. "If labor's revised proposal becomes reality, the actual labor cost burden will increase sharply to a level that businesses on the ground simply cannot bear," he said.

Yang Ok-seok, a director at the Korea Federation of Small and Medium Business, said the situation in the field was so dire that some were calling for a cut to the minimum wage. "Labor costs are the first thing businesses cut when times get tough, so the cumulative burden of minimum wage increases must be factored in," he said. Yang added that some workers themselves were asking for no further increases. "Please also listen to the voices of those on the ground who are afraid of losing their jobs," he said.

The minimum wage deliberation process works by having both sides repeatedly submit revised proposals to narrow the gap. The commission is set to continue its review after receiving further revised proposals from labor and management.

If no agreement is reached, the public interest members of the commission may propose a "deliberation facilitation range" to guide a compromise, or the minimum wage may ultimately be decided by a vote.