Next year’s minimum wage is 9,860 won per hour and 2,060,740 won per month… 2.5% increase

The minimum wage for 2024 was set at 9,860 won per hour and 2,060,740 won per month (based on 209 hours). The amount is 2.5% higher than this year (9,620 won per hour, 2,010,580 won per month), and both labor and management are protesting over the level of increase.

The Minimum Wage Committee made this decision at the 15th plenary meeting on the 19th after an all-night discussion at the Sejong Government Complex. 10,000 won and 9,860 won, the final proposals (11th amendment) presented by labor and management, were put to a vote. As a result, 17 votes were for 9,860 won presented by employers’ representatives representing the management world, 8 votes were for 10,000 won suggested by labor representatives representing labor circles, and 1 vote was abstention.

Currently, the Minimum Wage Committee consists of a total of 26 members, including 8 workers’ members (one out of 9 was arrested and dismissed), 9 employers’ members, and 9 public interest members. The result of the vote on this day is interpreted as the fact that most of the public interest members raised the hands of the user members.

Regarding next year’s minimum wage, the biggest concern was whether it would break 10,000 won for the first time in history. In the end, it was concluded that the level was less than 10,000 won, which was the desire of the labor community.

At the request of the public interest members, labor and management continued to present their respective amendment requests, narrowing the gap little by little. This is because administrative procedures have reached a situation where the deliberation cannot be postponed any longer.

At the end of the discussion, the labor-management gap was narrowed to 180 won (10,020 won for labor, 9,840 won for management), and news that an agreement was reached at 9,920 won was conveyed outside the conference room. handed down

It is estimated that between 650,000 and 3,347,000 workers will be affected by the minimum wage next year. The ‘minimum wage impact rate’, which refers to the proportion of workers estimated to be directly affected by the minimum wage among all workers, ranges from 3.9 to 15.4%.

The minimum wage committee held marathon negotiations over two days at the end of the discussion.

The 14th plenary meeting started at 3:00 pm on the 18th, but as fierce discussions continued, the order was changed beyond midnight. Even after the order change, the suspension and resumption were repeated, and the minimum wage level was decided around 6 am that day.

This year was recorded as the year in which it took the longest to pass a minimum wage level. The minimum wage system has been changed three times since its introduction in 1988, and the longest review period from 2007 when the current method was applied to last year was 108 days in 2016.

This year, the minimum wage deliberation period was 110 days, breaking the record for the longest under the current system in seven years.

The minimum wage has steadily risen from 462.5 won and 487.5 won in 1988, the first year of its introduction (differentiated application by industry only in the first year), to 1,05 won in 1993, exceeding 1,000 won, and 2,100 won in 2001, exceeding 2,000 won.

The minimum wage and year-on-year increase rate over the past five years was 8,350 won (10.9%) in 2019, 8,590 won (2.87%) in 2020, 8,720 won (1.5%) in 2021, and 9,160 won in 2022 ( 5.05%), 9,620 won (5.0%) this year.

In accordance with the Minimum Wage Act, the Minimum Wage Committee will submit the next year’s minimum wage bill to the Ministry of Employment and Labor.

The Ministry of Labor must announce next year’s minimum wage by August 5. If the minimum wage is notified, it will take effect on January 1 of the following year.

Prior to the announcement of the minimum wage, both labor and management can file an objection, and the Ministry of Labor can request a reconsideration by the Minimum Wage Commission if the objection is deemed reasonable. However, there has never been a reexamination in the history of the domestic minimum wage system.

After the minimum wage was decided for next year, workers’ representatives protested, saying, “It’s no different than a real wage cut,” and “It has resulted in further acceleration of income inequality.” The member of the user committee left without commenting.

“The minimum wage for next year was decided at a level that fell short of the economic growth rate and inflation rate (forecast),” said Ryu Ki-seop, secretary-general of the Federation of Korean Trade Unions, meeting with reporters. “This is tantamount to a real wage cut.”

On the other hand, the Small Business Federation issued a statement and said, “Small business owners have been urging for a minimum wage freeze in consideration of the cost structure and economic situation.”

(Source: Yonhap News / Translation of an article : Junbeom from JT News)