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South Korean labor unions formally proposed a minimum hourly wage of 12,000 won (US$7.90) for next year, a 16.3 percent increase from the current rate, at the start of formal negotiations at the Minimum Wage Commission. The proposal, which would translate to a monthly wage of 2.508 million won based on a standard 209-hour work month, was put forward Monday by the Federation of Korean Trade Unions and the Korean Confederation of Trade Unions, the country's two umbrella labor organizations.

The unions argued that the current minimum wage—set at 10,320 won per hour for this year—no longer reflects basic public expectations, noting that the average increase of the past three years was less than the average inflation rate over the same period. The Minimum Wage Commission, composed of labor, business, and public interest representatives, sets the rate each year and has been meeting since April, with its sixth plenary session scheduled for Tuesday.

Coverage Comparison

Reporting on the proposal comes from Yonhap News, South Korea's leading wire service, in two separate articles. The first, published Monday, focused on the labor unions' formal demand and the procedural context, noting that the business circle has yet to announce its own proposal. Market observers, according to that report, expect employers to call for a freeze or a smaller increase.

The second article, which described the negotiations as "strained from the get-go," placed greater emphasis on the concerns of small businesses and the cautionary lessons from the Moon Jae-in administration, when rapid minimum wage hikes placed heavy pressure on small businesses. That report framed the talks as a delicate balancing act between labor demands and economic realities, citing a survey by the Korea Enterprises Federation that paints a difficult picture for self-employed business owners.

Key Claims

  • Labor groups demanded a minimum wage of 12,000 won for next year, a 16.3 percent increase from this year's rate of 10,320 won per hour, as reported by Yonhap News.
  • The Minimum Wage Commission, which includes labor, business, and public interest representatives, sets the minimum wage each year.
  • The business circle has not yet announced its own proposal for next year's rate.
  • A survey by the Korea Enterprises Federation, released Tuesday, found that 57 percent of 500 self-employed business owners nationwide said business conditions had worsened compared with last year.
  • In the same survey, 44.6 percent of respondents favored freezing the minimum wage, and nearly 60 percent said they had no remaining capacity to hire additional workers. Additionally, 34 percent reported earning less each month than this year's minimum monthly wage of 2.156 million won.
  • Employer groups have proposed allowing differentiated minimum wages for certain sectors, including Korean restaurants, foreign restaurants, and snack bars such as gimbap shops, arguing that small businesses in these sectors cannot absorb rising labor costs.
The same report noted that last year, 2.769 million workers—12.4 percent of all wage earners—received less than the legal minimum wage, suggesting the current system already fails to protect many workers it is intended to help. The accommodation and food service sector was highlighted as facing particularly severe pressure, with 31.6 percent of its workers earning below the minimum wage.

Perspectives

Labor unions (Federation of Korean Trade Unions and Korean Confederation of Trade Unions): Argue that the minimum wage should be raised sharply to 12,000 won per hour, citing that the average increase over the past three years has lagged behind inflation and that the current wage no longer meets basic public expectations.

Employer groups (as cited by Yonhap): Propose differentiated minimum wages for certain small-business sectors, such as restaurants and snack bars, contending these businesses cannot absorb rising labor costs. They have not yet announced a unified proposal for the overall rate, but survey data referenced in the reporting suggests many small-business owners favor a freeze.