South Korea Debates Industry-Specific Minimum Wages Amidst Business-Labor Divide

Discussions on applying differentiated minimum wages by industry have officially commenced at the Minimum Wage Committee's sixth plenary session, marking a significant shift in the annual wage-setting process. This move comes after the labor side's proposal to expand minimum wage coverage to contract workers was rejected in previous sessions. Business circles are pushing for industry-specific rates, citing the severe difficulties faced by sectors like retail, accommodation, and food services due to a prolonged economic downturn and sluggish domestic demand.

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The minimum wage is a necessary measure to alleviate the polarized labor market reality by supplementing real income through the minimum wage. Differentiated application by industry will justify discrimination between workers and fuel polarization in the labor market.

Representing the business community, Ryu Ki-jeong, Executive Vice President of the Korea Employers Federation (KEF), argued that the minimum wage is a key factor exacerbating the burden on businesses, particularly small business owners. He stressed that differentiated application is not about stigmatizing certain industries but about providing a lifeline to those on the brink of collapse, thereby helping to maintain employment. Yang Ok-seok, head of the SME Central Federation's Human Resources Policy Department, echoed this sentiment, calling it a "ladder of survival."

However, the labor sector has vehemently opposed the proposal. Ryu Ki-seop, Secretary-General of the Federation of Korean Trade Unions (FKTU), stated that the minimum wage is crucial for supplementing real income and mitigating labor market polarization. He warned that differentiating minimum wages by industry would legitimize discrimination among workers and worsen existing inequalities. Lee Mi-seon, Vice President of the Korean Confederation of Trade Unions (KCTU), criticized the committee's earlier rejection of extending minimum wage coverage to special employment and platform workers, arguing that it ignored the survival rights of millions. She accused business representatives of using a "sophistic" argument that industry-specific differentiation supports their logic.

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You are stopping the logic of differentiated application by industry by turning away from the survival rights of 8.7 million special employment (service providers) and platform workers for the formal reason that they are not workers under the Labor Standards Act.

The committee is expected to deliberate on industry-specific minimum wage application over the next two to three sessions. Given the strong opposition from labor and the fact that such proposals have been rejected annually, there is a possibility of the motion being voted down again. Following these discussions, both labor and business sides are expected to present their final proposals for next year's minimum wage by the end of the month, setting the stage for intense negotiations over the final figure.

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Differentiated application by industry is not discrimination that stigmatizes a specific industry, but a ladder of survival that provides breathing room for industries on the verge of collapse, thereby maintaining employment.