A national commission on Tuesday set next year's minimum hourly wage at 8,720 won ($7.25), a level representing the smallest-ever annual increase of 1.5 percent.
The decision came in the early hours of the day during the ninth plenary meeting of the Minimum Wage Commission, which is comprised of nine members each from all three sides ― employers, employees and those representing social interests.
The increase is the smallest since the minimum wage was first introduced in 1988. The next smallest was 2.7 percent during the financial crisis in 1998.
This year's negotiations were particularly tough due to the economic difficulties stemming from the coronavirus pandemic.
While labor unions stressed the importance of ensuring that low-income workers meet their basic needs, employers called for easing the financial burden on businesses.
Tuesday's decision appeared to be in favor of small- and medium-sized businesses as well as mom-and-pop stores.
The new minimum wage was proposed by those commissioners representing social interests after employers and employees failed to bridge their gap.
Employees had initially sought a 16.4 percent increase to 10,000 won, while employers had sought a 2.1 percent cut to 8,410 won.
The proposal passed by a vote of 9-7. The vote was attended by seven employer commissioners and nine public interest commissioners. Seven other panel members at the meeting, including all five recommended by the Federation of Korean Trade Unions, left the session in protest of the proposal. The four remaining members, affiliated with the Korean Confederation of Trade Unions, did not attend the meeting.
By law, the commission is required to present the new minimum wage to the labor minister, who is then required to announce it publicly by Aug. 5.
The new wage would then take effect on Jan. 1.
Both labor and management can object to the agreed minimum wage, and subject to the minister's approval, request a reevaluation by the commission. A reevaluation has never occurred since the minimum wage was introduced. (Yonhap)
The decision came in the early hours of the day during the ninth plenary meeting of the Minimum Wage Commission, which is comprised of nine members each from all three sides ― employers, employees and those representing social interests.
The increase is the smallest since the minimum wage was first introduced in 1988. The next smallest was 2.7 percent during the financial crisis in 1998.
This year's negotiations were particularly tough due to the economic difficulties stemming from the coronavirus pandemic.
While labor unions stressed the importance of ensuring that low-income workers meet their basic needs, employers called for easing the financial burden on businesses.
Tuesday's decision appeared to be in favor of small- and medium-sized businesses as well as mom-and-pop stores.
The new minimum wage was proposed by those commissioners representing social interests after employers and employees failed to bridge their gap.
Employees had initially sought a 16.4 percent increase to 10,000 won, while employers had sought a 2.1 percent cut to 8,410 won.
The proposal passed by a vote of 9-7. The vote was attended by seven employer commissioners and nine public interest commissioners. Seven other panel members at the meeting, including all five recommended by the Federation of Korean Trade Unions, left the session in protest of the proposal. The four remaining members, affiliated with the Korean Confederation of Trade Unions, did not attend the meeting.
By law, the commission is required to present the new minimum wage to the labor minister, who is then required to announce it publicly by Aug. 5.
The new wage would then take effect on Jan. 1.
Both labor and management can object to the agreed minimum wage, and subject to the minister's approval, request a reevaluation by the commission. A reevaluation has never occurred since the minimum wage was introduced. (Yonhap)
