The minimum wage of next year will rise by 1.5% to 8,720 KRW.
The Minimum Wage Commission of Korea, an organization that deliberates and decides on the minimum wage, held the 9th full session at the Sejong Government Complex on the morning of the 14th and concluded the minimum wage for next year at 8,720 KRW per hour.
This is 130 KRW more than this year's minimum wage of 8,590 KRW.
The monthly wage will be 1,822,480 KRW, based on 209 working hours, which is 27,170 KRW more than this year.
The minimum wage for 2021 was issued by the public interest commissioners who were recommended by the government, and saw 9 votes in favour and 7 votes in opposition. 7 employer comissioners and 9 public interest commissioners participated in the vote.
At the meeting, 5 worker councilors recommend by the Federation of Korean Trade Unions and 2 employer commissioners from the Small Business Association exited in protest of the bill.
The Minimum Wage Committee consists of 27 members, including 9 worker councilors, 9 employer commissioners and 9 public interest commissioners. The 4 worker councilors from the Korean Confederation of Trade Unions did not attend the session.
The 1.5% increase is the lowest in 32 years when the national minimum wage was first implemented. The lowest minimum wage increase before this was during the financial crisis involving the International Monteray Fund (IMF) in 1998.
Many believe this is due to first considering the financial difficulties small business owners and small to medium-sized businesses are facing due to the COVID-19 pandemic.
The decision-making process saw a rather tense discussion as employees voiced protecting low-income labourers and their livelihood while employers voiced alleviating management difficulties amid the pandemic.
The 10,000 KRW (16.4% increase) and 8,410 (2.1% decrease) proposed by employees and employers respectively clearly show the wide gap between the two parties.
The Minister of Labour must announce next year's minimum wage by the 5th of next month. This notice will enable the minimum wage of 2021 to take effect starting January 1 of next year.
Ahead of next year's minimum wage announcement, both employees and employers can raise objections to the plan if there is believed to be a reason to raise objections. There has never been a retrial in the history of Korea's minimum wage system.
