South Korea's 2025 Minimum Wage Increase Deemed Insufficient by Labor Advocates

South Korea's minimum wage for 2025 has been set at 10,700 won per hour, marking a 3.7% increase from the current year. This decision, reached by the Minimum Wage Committee, falls short of the labor sector's final proposal of 10,730 won (a 4% increase) and is deemed insufficient by labor advocates to guarantee the basic livelihood of low-wage workers.

The committee's decision was based on the employers' final proposal, which was lower than the public interest members' recommended range of 10,600 to 10,860 won. The labor sector had initially proposed 10,730 won, while employers pushed for 10,700 won. Despite deliberations and revisions, no consensus was reached, leading to a vote that favored the employers' figure. This hourly wage translates to a monthly salary of 2,236,300 won, an increase of 79,420 won from the current year's 2,156,880 won.

Labor groups argue that this increase is inadequate, especially considering the rising cost of living. The monthly living cost for a single, non-married worker in 2025, factoring in inflation, is estimated at 2,820,000 won, leaving a shortfall of 583,700 won. Furthermore, the average minimum wage increase over the past three years (2.37%) has lagged behind the average inflation rate (2.67%), resulting in a cumulative loss of real wages.

A significant point of contention was the proposal to extend minimum wage coverage to approximately 8.7 million gig, platform, and freelance workers, who are currently not covered under the minimum wage system. This proposal was formally raised for the first time but was ultimately rejected due to strong opposition from the employers' side. Employers have consistently cited the difficulties faced by small business owners as a reason to oppose minimum wage hikes and expanded coverage.

However, critics argue that issues faced by small business owners, such as high delivery fees, unfair franchise contracts, and rising rents, should be addressed through separate policy measures rather than by limiting wage protections for workers. The Minimum Wage Committee has called for the establishment of a task force to review and improve the minimum wage determination criteria and to develop measures for extending coverage to contract and freelance workers. The Ministry of Employment and Labor is expected to lead this initiative.