South Korea Debates Lower Minimum Wage for Accommodation, Food Service Workers Amid Instability

Workers in South Korea's accommodation and food service industries face the highest levels of employment instability across all sectors, with a substantial number working part-time and earning low wages. Analysis of national data reveals that 36% of these workers are employed in short-term positions, working fewer than 35 hours per week. Furthermore, a staggering 80% earn less than 3 million won (approximately $2,150 USD) per month.

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The per capita added value for accommodation and food service industry employees is 28 million won, only one-sixth of manufacturing's 170 million won.

This precarious employment situation is highlighted by the high proportion of temporary and daily workers, which stands at 36%, significantly higher than the overall average of 19.8% and even exceeding the construction industry's 33.7%. The share of permanent, full-time employees, often considered "quality jobs," is only 27.7% in these sectors, compared to manufacturing's 7.7% share of temporary workers.

Amid discussions for the upcoming year's minimum wage, business groups are pushing for a differentiated minimum wage, arguing for a lower rate for workers in the accommodation and food service sectors. They cite lower per-capita added value in these industries compared to manufacturing as justification. However, labor advocates and experts strongly criticize this proposal, warning that it would deepen labor market polarization and disproportionately harm vulnerable workers.

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The differentiated minimum wage application is a matter of survival for small business owners and small and medium-sized enterprises.

Critics argue that applying a lower minimum wage would imply that workers in these sectors have a lower standard of living, contradicting the fundamental purpose of the minimum wage, which is to ensure a basic standard of living. Experts also point out that the primary financial struggles for small business owners in these sectors are not solely due to labor costs. A 2025 survey of small business owners indicated that rising raw material costs (73.9%) were the biggest concern, followed by intense competition (62.4%), rent (32.8%), and declining commercial areas (28.6%). The impact of the minimum wage was cited as a concern by only 26.3% of respondents.

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The minimum wage system was introduced with the purpose of guaranteeing the minimum living standards of workers. Arguing for differentiated minimum wages is no different from saying that workers in certain industries can afford to eat or wear less.

The push for differentiated minimum wages raises concerns about creating a two-tiered system, potentially discouraging individuals from seeking employment in these sectors and leading to a further decline in job quality. The debate underscores the tension between business cost concerns and the imperative to ensure fair wages and stable employment for all workers.

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The argument that employers find it difficult to afford the minimum wage indicates confusion about the function and role of the minimum wage system.