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Bus service resumes, but questions about the growing financial burden on Seoul's government remain

Published: 15 Jan. 2026, 18:20

City buses sit idle at a depot in Eunpyeong District, northern Seoul, on Jan. 14, the second day of the city's bus operators' strike. [YONHAP]

With management and labor at Seoul’s city bus companies signing a wage and collective bargaining agreement, public transportation in the capital city has returned to normal.

But there are growing concerns that the financial burden on the Seoul Metropolitan Government could increase, as most of the demands from the Seoul Bus Drivers Labor Union, affiliated with the Korean Confederation of Trade Unions, were accepted.

In last year’s wage and collective bargaining talks, which resumed at 3 p.m. on Wednesday and ran for about nine hours, the two sides agreed to accept a mediation proposal put forward by public interest members of the National Labor Relations Commission‘s Seoul branch.

As a result, unionized Seoul city bus drivers will see their wages rise 2.9 percent. That is 2.4 percentage points higher than the first mediation proposal, which had called for a 0.5 percent raise. Because the figure is close to the 3.0 percent originally demanded by the union, the outcome is widely seen as effectively accepting the union’s proposal.

Another union demand — extending the retirement age — was also written into the agreement. The current retirement age of 63 will be raised in stages: Starting in July this year, it will be extended to 64, and from July 2027 it will rise to 65.

However, on the union’s call to scrap Seoul’s “bus operation inspection” system, the parties agreed instead to create a tripartite task force of labor, management and the city government to discuss the issue. Under the inspection system, the city monitors buses that receive subsidies to ensure they meet standards for safety, punctuality and public service.

In contrast to how much of the union’s agenda made it into the deal, the core demand of the Seoul Bus Operators Association, which represents bus operators, was left out. Management had pushed for an overhaul of the wage system in line with a court ruling on ordinary wages.

A digital sign shows bus services are suspended at a stop near Seoul Station in central Seoul on Jan. 14, on the second day of a city bus drivers’ strike. [YONHAP]

In the end, that overhaul was postponed, and management accepted the union’s position that the way bonuses are counted as part of ordinary wages should be decided after the ongoing lawsuit is concluded.

Other local governments have restructured their wage systems to resolve uncertainty surrounding ordinary-wage lawsuits, while keeping 2025 wage increases at around 10 percent. Among the seven local governments that run city buses under a semipublic system, Seoul is the only one that failed to revamp its wage framework in this year’s negotiations.

Because the 2025 talks ended in what many see as a one-sided victory for the union, debate is growing over how effective the semipublic bus system really is. Under the semipublic model, local governments cover any deficits at bus companies with taxpayer money. The deal thus leaves the Seoul Metropolitan Government shouldering a massive financial burden.

In fact, separate from the newly agreed 2.9 percent raise, an additional wage hike is effectively locked in because a court has recognized bonuses as part of ordinary wages.

Labor and management are currently fighting in court over how large that additional increase should be. If the court fully accepts the union’s argument, wages would have to rise by up to an extra 16.4 percent — meaning last year’s wage increase could end up being as high as 19.78 percent, rather than just 2.9 percent.

Park Jeom-gon, left, leader of the Seoul Bus Drivers Labor Union, poses for a photo with Kim Jeong-hwan, right, head of the Seoul Bus Operators Association, at the Seoul Regional Labor Relations Committee in the capital on Jan. 15, after reaching a collective wage deal with management, ending a two-day strike that caused major disruptions for commuters. [YONHAP]

In 2024, unionized Seoul city bus drivers earned an average of 63.24 million won ($43,000) a year. If the ordinary-wage ruling comes down in the union’s favor, their average annual pay in 2025 could jump to as much as 75.75 million won.

City officials estimate that every 1 percent wage increase requires an additional 15 billion won in annual spending. To cover the potential increase, Seoul would need to secure around 297 billion won in extra funds. On top of that, it must also find another 297 billion won or more to pay for this year’s wage deal. Even excluding this latest raise, the city’s accumulated deficit from supporting the bus industry had already reached 878.5 billion won as of last year.

“The root cause of the Seoul city bus strike is that the city’s semipublic bus system has hardened into a structure where overall deficits are simply covered by the city, with weak cost control, performance accountability and transparency,” said Hwang Ji-wook, head of the center for urban reform at the Citizens’ Coalition for Economic Justice. “Instead of just patching things up now that the strike is over, the city needs to completely redesign the semipublic system from the perspective of ordinary citizens.”

Some observers also warn that the sharp rise in labor costs could lead to higher fares, since the nature of the semipublic system means that excessive financial burdens on the city ultimately fall on residents.

“Whether it’s the city or the companies, they can’t absorb such a large wage hike all at once, so they will eventually reach for the fare card,” said Kim Sang-chul, head of the policy center at the advocacy group Our Public Transport Network. “It’s a situation where Seoul citizens become ‘suckers’ so that workers at private companies — the bus operators — can get a pay raise.”

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.
BY MOON HEE-CHUL [[email protected]]