Next year’s minimum wage to increase by 2.9 percent

It has been confirmed that next year’s hourly minimum wage will amount to 8,590 won, a 2.9 percent rise from 8,350 won of this year. Meanwhile, the increase rates of last year and this year are 16.4 percent and 10.9 percent, respectively. The pace of the increase stands to slow down just as some in the political sector have argued so far.

The decision was made by the Minimum Wage Commission’s 13th general meeting held on Friday at the government complex in Sejong City. Next year’s minimum wage will be notified with hourly and monthly figures included under the name of the Employment and Labor minister on Aug. 5, following an objection period.

Starting from the first day of next year, the monthly salary for those who work 40 hours per week with paid weekly off will rise by 50,160 to 1,795,310 won. The actual hourly wage reaches 10,318 won with paid off factored in.

Labor and management, which had staying at odds until late night, managed to make the labor commission’s proposal of 8,880 won, a 6.3 percent increase, and the employer commission’s proposal of 8,590 won, a 2.87 percent rise, respectively. The vote decided on the employer commission’s proposal with 15 votes, while the labor commission’s proposal gained 11 votes and one abstention. A total of 27 voters joined - nine each from the public good commission, the employers, and workers.

Since the minimum wage system was introduced in 1988, the increase rate of 2.9 percent is the third lowest following 2.7 percent between 1998 and 1999 during the Asian financial crisis and 2.75 percent in 2010 right after the global financial crisis.

The decision faced mixed responses from labor and management. The employer commissioners said that it would serve as an opportunity to reduce burdens on the shoulders of SMEs and mom-and-pop stores. By contrast, the Federation of Korea Trade Unions spoke strongly against the decision, saying, “It is an excruciatingly painful decision that does not respect low-paying workers. It is just a disaster of the minimum wage.”


Eun-Seo Park clue@donga.com