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Labor unions call for 14.7% rise in minimum wage as gov't set to deliberate

Published: 11 Jun. 2025, 15:48 Updated: 11 Jun. 2025, 16:13

Labor unions demand a 11,500 won minimum wage for 2025 in a rally held on June 11 in central Seoul. [NEWS1]

Labor unions on Wednesday proposed that the minimum hourly wage for 2026 be raised to 11,500 won ($8.40) — a 14.7 percent increase from this year — equivalent to a monthly wage of 2,403,500 won based on a 40-hour workweek and 209 working hours per month.

The Federation of Korean Trade Unions (FKTU) and the Korean Confederation of Trade Unions, along with civil society groups, held a press conference in front of the Sejong Center for the Performing Arts in central Seoul to announce their first official demand for next year’s minimum wage.

This is the first proposed figure from labor groups as the Minimum Wage Commission begins deliberations on the wage level for 2026.

Business groups have yet to submit their demands. Citing the impact of U.S. tariffs and the aftermath of recent martial law unrest, they are likely to call for a freeze or only a marginal increase, citing the financial struggles of small business owners.

The labor community explained that its proposal is based on the Constitution and the Minimum Wage Act, aiming to raise real wages to improve the quality of life for low-income earners and to reduce income inequality.

“The current minimum wage increase rate has not kept up with the rise in living costs, and real wages have actually declined over the past five years due to the expanded scope of wage inclusions,” the two federations said. “Only when the spending power of low-wage workers rises through a minimum wage increase will small business owners see an uptick in sales and be able to benefit as well.”

Labor unions demand a 11,500 won minimum wage for 2025 in a rally held on June 11 in Daejeon. [NEWS1]

The labor groups based their calculation on Statistics Korea’s Household Income and Expenditure Survey, estimating an appropriate cost of living per household and applying the share of income from wages — 82.5 percent. Taking into account the economic downturn, rising exchange rates and both domestic and global uncertainties, they set the appropriate range for the wage hike between 7.8 percent and 26.9 percent.

The final proposed increase of 14.7 percent reflects an 11.8 percent gap between the economic indicators — such as average inflation and economic growth over the past five years — and actual minimum wage increases during the same period, along with a 2.9 percent decline in real wages due to the 2024 expansion of the wage inclusion scope.

Last year, labor groups demanded 12,600 won per hour — a 27.8 percent increase — but this year’s proposal is relatively lower in consideration of the current economic situation.

The current minimum wage surpassed 10,000 won for the first time this year, but the increase rate stood at 1.7 percent compared to the previous year, the second-lowest since 2021 when the rate was 1.5 percent.

Labor unions demand a 11,500 won minimum wage for 2025 in a rally held on June 11 in Daejeon. [NEWS1]

Looking back over the past five years, the minimum hourly wage was 8,720 won in 2021, with an increase of 1.5 percent; 9,160 won in 2022, with an increase of 5.05 percent; 9,620 won in 2023, with an increase of 5 percent; 9,860 won in 2024, with an increase of 2.5 percent; and 10,030 won in 2025, with an increase of 1.7 percent.

“Around this time last year, we based our proposal on 100 percent of the appropriate cost of living coming from wages,” said a representative from FKTU. “This year, we adjusted that ratio to between 85 and 100 percent, in light of economic conditions.”

The labor community also called for the application of the minimum wage to workers in contract-based employment, including special employment types, platform workers, freelancers and domestic workers.

These workers are currently excluded from minimum wage coverage as they are not recognized as employees under the Labor Standards Act.

Labor unions demand a 11,500 won minimum wage for 2025 in a rally held on June 11 in central Seoul. [NEWS1]

“The narrower the scope of minimum wage coverage, the more deeply entrenched the low-wage labor structure becomes — worsening poverty and inequality,” the two federations said. “The government should stop hiding behind the Labor Standards Act and offer a solution immediately.”

They also demanded debt relief for small business owners and the self-employed suffering from the post-Covid economic shock and recent unrest.

During the fourth plenary session of the Minimum Wage Commission held Tuesday, discussions were held on extending the minimum wage to contract-based workers, but there remained a significant divide between labor and management.

In a statement released after the meeting, public interest members of the commission said, “We determined that the existing data on wage structures for contract-based jobs is insufficient to move the discussion forward,” and called on the Ministry of Employment and Labor to conduct a survey of the relevant occupations, scale, income and working conditions and submit the findings for 2027 wage deliberations.

Government officials hold the fourth plenary session of the Minimum Wage Commission on June 10 at the Sejong Government Complex in Sejong. [NEWS1]

The members also noted, “We recommend that discussions on applying the minimum wage to workers not recognized as employees under the Labor Standards Act — such as those in special forms of employment or on platforms — be taken up not by this commission but by relevant authorities with actual jurisdiction, such as the government, the National Assembly and the Economic, Social and Labor Council.”

The Minimum Wage Commission will hold its fifth plenary session on June 17 to begin full-scale deliberations. The final wage must be submitted to the labor minister by the end of this month. To date, the commission has met the statutory deadline only nine times.

Translated from the JoongAng Ilbo using generative AI and edited by Korea JoongAng Daily staff.
BY LEE HAY-JUNE [[email protected]]