Korea's minimum wage to increase to 9,860 won next year

The voting result of next year's minimum wage is shown at the government complex in Sejong on Wednesday. [YONHAP]

Next year's hourly minimum wage was set at 9,860 won ($7.80) Wednesday, an increase of 2.5 percent from this year.

The decision, which was decided via an overnight marathon debate, landed close to the proposal by the nation's employers to freeze the minimum wage at its current 9,620 won.

The new minimum wage is 240 won higher than this year's wage and will translate to a monthly wage of nearly 2.07 million won.

The 27-member Minimum Wage Commission, composed of nine representatives each from government, business and labor, determined the minimum wage level in a vote as the labor and business sides remained sharply divided and were unable to reach a decision through agreement.

The labor side had initially proposed 12,210 won as the 2024 minimum wage, a 26.9 percent increase from this year's 9,620 won, citing rising inflation, while the business side had suggested a freeze.

In the run-up to the decision, a key point of attention had been whether the 2024 minimum wage would surpass the 10,000 won threshold for the first time, but the decision fell short of the mark.

In the run-up to the decision, there was rampant speculation as to whether the 2024 minimum wage would surpass the 10,000 won threshold for the first time, but the decision fell short of the mark this year.

This year's debate marks the longest time minimum wage negotiations have taken since the current wage determination system was introduced in 2007.

After the labor minister made an official request for the commission to review next year's minimum wage on March 31, it took 110 days to set the new minimum wage. The previous record was in 2016 when the commission took 108 days to decide.

By law, the commission is required to present the new minimum wage to the labor minister, who is then required to announce it publicly.

Both sides can object to the agreement and, subject to the minister's approval, request a reevaluation by the commission. However, a reevaluation has never occurred since the minimum wage system was introduced in 1988.

The minimum wage rose by 10.9 percent to 8,350 won in 2019, 2.87 percent to 8,590 won in 2020, 1.5 percent to 8,720 won in 2021, 5.05 percent to 9,160 won in 2022 and 5 percent to 9,620 won this year.

The new wage, if finalized, will come into effect on Jan. 1, 2024.

BY PARK EUN-JEE, YONHAP [park.eunjee@joongang.co.kr]