Minimum wage in South Korea set for hike in 2024

The minimum wage has been set at 9,860 won (US$7.80), resulting in a monthly salary of nearly 2.07 million won (US$1,638) for employees.
By: | July 21, 2023
Topics: Compensation and Benefits | News | South Korea

South Korea’s Minimum Wage Commission has announced that the hourly minimum wage for 2024 will be set at 9,860 won (US$7.80), reflecting a 2.5% from 2023. With the new rate, the monthly pay for employees will see a slight rise, reaching nearly 2.07 million won (US$1,638), up from this year’s 2.02 million won (US$1,598).

The decision has faced contrasting criticism from both labour and business representatives. Labour representatives argued that the hike fails to keep pace with inflation, while business representatives expressed concerns that the higher minimum wage will add to the burden of personnel expenses faced by organisations. Initially, labour suggested a 26.9% increase to 12,210 won (US$9.66), while the business side advocated for a wage freeze.

Ryu Ki-seop, a Senior Official at the Federation of Korean Trade Unions, said, “The 2024 minimum wage was set at a level that fell short of the outlook for next year’s economic growth and inflation rates. Low-wage employees have faced more difficulties as the minimum wage has failed to reflect a sharp price rise for the last two years.”

READ MORE: Minimum wage raise in South Korea could see unemployment spike

On the other hand, business representatives expressed their concerns regarding the impact on organisations and small business owners. Chu Kwang-ho, Head of the Economic and Industry Division of the Federation of Korean Industries, explained, “Organisations and many small business owners have had a hard time due to sluggish sales and inventory accumulation caused by weak domestic demand. The new minimum wage hike is expected to increase the burden of personnel expenses and aggravate these difficulties.”

The new minimum wage decision will be submitted to the Ministry of Employment and Labour, which will publicly announce it no later than 5 August 2023. If approved, the new minimum wage will come into effect on 1 January 2024, reported The Korea Times.