First meeting on the minimum wage on the 21st… Labor and management in dispute over amounts and differential application

Start of deliberations on the 21st…”Unable to bear the burden for small business owners” vs “Real wages are declining”
Controversy over Bank of Korea report, introduction of Filipino caregivers leading to differential application in care industry, ‘[Herald Economy=Reporter Kim Yong-hoon] As the 21st, the date of the first plenary meeting of the Minimum Wage Commission for next year’s minimum wage decision approaches, labor and management are gearing up for a heated debate outside. In addition to the minimum wage amount of ₩10,000 on the table, clashes are expected over differential application among industries centered around the care industry.’,
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, ‘The Minimum Wage Commission, consisting of 27 representatives from labor and public interest, will hold its first plenary meeting for next year’s minimum wage deliberation at the Government Sejong Office on the 21st.’,
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, ‘With interest in whether the current minimum wage of ₩9,860 this year will exceed ₩10,000 next year, the increasing demands from the business sector for differential application by industry over the past few years have become a major point of contention.’,
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A signage for the 2024 minimum wage is seen at an Employment Welfare Plus Center in Seoul on the day before the start of the 13th term of the Minimum Wage Commission. The commission will hold its first plenary meeting for next year’s minimum wage deliberation. [Yonhap],
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, ‘Ahead of the deliberations, the Korea Enterprises Federation (Federation of Korean Industries) on the 16th disclosed in an “Analysis of the Rate of Workers Earning Below the Minimum Wage in 2023” report that 3,001,000 workers (13.7% of the total wage workers last year) earn hourly wages below the minimum wage.’,
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, ‘The Federation of Korean Industries stated, “As a result of significantly higher minimum wage increases accumulating over the years compared to prices and wages, labor market acceptance of the minimum wage has deteriorated,” noting particularly the difficult situation in small-scale businesses where it is challenging to accommodate the minimum wage.’,
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, ‘The Federation of Korean Industries released these statistics during this time of year before the start of minimum wage deliberations to emphasize that the minimum wage level is too high and used it as a basis for freezing or slightly increasing the minimum wage.’,
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, ‘On the other hand, the labor sector argues that the rate of workers earning below the minimum wage cannot be considered in determining the minimum wage, taking into account limitations in statistical methods.’,
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, ‘In reality, the statistics on workers earning below the minimum wage used by the Minimum Wage Commission as deliberation data are based on the Statistics Korea’s supplementary survey on economic activity population and the Ministry of Employment and Labor’s survey on work status by employment type, both of which have significant differences.’,
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, ‘In 2022, the rate of workers earning below the minimum wage based on the survey on work status by employment type is 3.4%, while based on the supplementary survey on economic activity population, it is 12.7%.’,
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, ‘The labor sector generally considers the rate based on the survey on work status by employment type to be more precise in terms of wage inclusion scope and hourly units. However, the Federation of Korean Industries argues that even the rate based on the supplementary survey on economic activity population does not adequately reflect paid leave hours, leading to underestimated figures.’,
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, ‘A labor sector official stated, “It is widely agreed between labor and management that the statistics are imperfect and cannot accurately capture the current situation of minimum wage workers.” and mentioned that “the members are generally aware of the limitations and do not significantly influence the deliberations.”‘,
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, ‘The labor sector has been advocating for significant increases in the minimum wage in recent years considering the inflation rate.’,
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, ‘The “Minimum Wage Movement Base for Everyone” to be launched on the 20th by major labor federations and civil organizations pointed out the declines in real wages for 2022 and 2023, by 0.2% and 1.1% respectively, stating that “the survival rights of low-wage workers are threatened due to declining real wages” and advocating for the realization of the minimum wage.’,
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, ‘Kim Yoo-sun, director of the Korea Labor & Society Institute, stated in a recent report on “Trends and International Comparisons of the Minimum Wage” that “for the minimum wage to fulfill its essential role, the rate of increase should exceed the sum of ‘economic growth rate + inflation rate'”, pointing out that the increase rates from 2021 to 2023 fell short of this.’,
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Greens Party lawmaker Lee Jasmin speaks during a news conference condemning President Yoon Suk-yeol’s statement on the differential application of minimum wage for migrants working in caregiving and domestic labor, in front of the presidential office in Yongsan-gu, Seoul on the 9th. [Yonhap],
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, ‘Another point where labor and management clash, ‘differential application by industry,’ is expected to bring about fiercer debates this year.’,
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, ‘In March, after the Bank of Korea proposed setting the minimum wage relatively lower for the care service industry, the labor sector raised objections, igniting controversy early on.’,
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, “Referencing the Bank of Korea’s report at the time, the Federation of Korean Industries mentioned in its report on the 16th that the rate of workers earning below the minimum wage in the ‘health and social welfare industry,’ mainly consisting of ‘care and health service employees,’ was 21.7%, while the rate in the ‘housekeeping and childcare helpers’ category under ‘household employment activities’ was the highest among all industries, reaching 60.3%. They argued that the high rates for these industries demonstrate the difficulty in realistically accommodating the minimum wage.”,
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, ‘Controversy is expected to surround the foreign caregivers introduced through pilot projects by the Ministry of Employment and Labor and the Seoul Metropolitan Government.’,
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, ‘The Filipino caregivers planned for introduction last year have been delayed due to local circumstances and are expected to arrive around August or September, but there are concerns that if the minimum wage is applied, their wages will not have a significant advantage compared to the current hourly wages of domestic helpers, which are around ₩15,000.’,
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, ‘However, the labor sector argues that differential application by industry is not in line with the essence of the minimum wage and will lead to a decrease in overall wage levels for workers.’,
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, ‘The Democratic Workers’ Research Institute, affiliated with the Korean Confederation of Trade Unions, stated in a recent report, “In countries that concurrently apply national minimum wages and differential application by industry and region, they generally set the minimum wage at a level exceeding the national minimum wage,” and said, “The argument of our business community aiming to lower the minimum wage in some industries and regions is the opposite of such cases.”‘,
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, ‘The labor sector is advocating for uniform increases in the minimum wage for all industries along with including platform workers and workers under special employment types who fall into the minimum wage blind spot.’,
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, ‘Additionally, the interpretation of where South Korea’s minimum wage stands internationally is another point where labor and management interpret differently every year. Due to different country-specific statistical standards, interpretations can vary on either side.’,
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, ‘According to a report by Director Kim Yoo-sun of the Korea Labor & Society Institute, based on the latest Organization for Economic Co-operation and Development (OECD) statistics, South Korea’s minimum wage level ranks 15th among the 28 OECD countries operating minimum wage systems, and when converted into purchasing power terms, it is in the middle at 13th place.’,
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, ‘The ratio of minimum wage to average wage and median wage ranks 7th and 8th respectively, indicating a high level. However, Director Kim noted that these rankings would change significantly if the statistical data and calculation standards were different.’,
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