South Korea finalises minimum wage for 2023

The Minimum Wage Commission, which is composed of nine members each from labour, business and the general public, struck the agreement recently during a plenary session held at the government complex in Sejong.

The new rate, which translates to a monthly wage of 2.02 million won, (US$1,553.8) will apply equally across all industries, affecting up to 3.4 million South Korean workers. The commission said it put the country’s growth, inflation and employment outlook into consideration when deciding it. 

During the negotiations, the labour side called for a significant increase from this year’s 9,160 won (US$7.04), demanding to carry out the previous Moon Jae-in administration’s promise to raise the minimum hourly wage to 10,000 won (US$7.69). 

Meanwhile, the management side had called for a freeze, citing the economic damage caused by the pandemic, coupled with the high interest rate, inflation and the high exchange rate. 

The final figure was proposed by the commissioners representing public interests after the labour and business commissioners failed to bridge their gap, and confirmed by a 12-1 vote.

All nine commissioners from the general public left the room before the vote. Four of the nine labour commissioners recommended by the Korean Confederation of Trade Unions also left the room in protest of the proposal before the vote. 

READ: Companies in South Korea urged to refrain from wage hikes

By law, the commission is required to present the new minimum wage to the labour minister, who is then required to announce it publicly by August 5. It marks the first time in eight years that the commission delivered its verdict on time, according to Yonhap.