KEMA disappointed by minimum wage hike, urges industry-specific application

The Korea Economic and Management Association (KEMA) voiced concerns regarding the 3.7% increase in the minimum wage for 2027, which will set the hourly rate at 10,700 won. KEMA stated that this decision, exceeding the previous year's increase rate of 2.9%, is disappointing, especially since small business owners had hoped for a freeze.

“

We are disappointed that the minimum wage for 2027 was decided at 10,700 won, exceeding the previous year's increase rate of 2.9%, despite small business owners hoping for a minimum wage freeze.

The association highlighted that the failure to implement differentiated minimum wage application for sectors like accommodation and food services, which are already at their payment limits, is regrettable. Small businesses and self-employed individuals are currently struggling with declining sales and rising costs due to a combination of high exchange rates, inflation, and sluggish consumer sentiment.

“

The failure to apply differentiated minimum wages to sectors like accommodation and food services, which have already reached their payment capacity, is regrettable.

KEMA anticipates that this minimum wage hike will exacerbate the hardships for small businesses and self-employed individuals. They also expressed concern about the negative impact on employment opportunities for vulnerable groups, including young people and low-income earners, who are directly affected by the minimum wage.

“

This decision is expected to increase the difficulties for small businesses and the self-employed, and it is feared to have a negative impact on jobs for vulnerable groups such as young people and low-income earners.

Looking ahead, KEMA hopes for more rational minimum wage decisions. They are calling for the institutionalization of differentiated minimum wage application by industry and for improvements in the decision-making process to prioritize employers' payment capacity and productivity.

“

We hope for institutional improvements such as the institutionalization of differentiated minimum wage application by industry and the prioritization of employers' payment capacity and productivity in the decision-making process for future rational minimum wage decisions.