SME Sector: "Minimum Wage Increase Ignores On-Site Burden"

[Financial News] The SME sector expressed deep regret over the decision to raise the minimum wage for 2026 by 2.9% to 10,320 won compared to this year. There is concern that the increase in labor costs could further exacerbate the burden on the field amid sluggish domestic demand and a complex crisis.
The Korea Federation of SMEs pointed out in a statement on the 11th, "Amid the prolonged slump in domestic demand and the expansion of internal and external uncertainties, many SMEs and small business owners are being pushed to the limit, and small business owners who cannot cope with this are increasingly choosing to close down."
During this year's minimum wage deliberation process, the SME sector continuously raised demands for differentiated application by industry and a freeze, but these were not accepted. The Korea Federation of SMEs stated, "We conveyed the urgent situation on the ground and continuously requested differentiated application by industry and a freeze on the minimum wage, but their voices were ignored in the decision-making process."
They also expressed disappointment over the failure to apply differentiated rates. The Korea Federation of SMEs said, "Despite presenting specific industries, grounds, and application plans and receiving positive responses from some public interest committee members, we cannot hide our disappointment that it was not realized this year either," emphasizing that "differentiated application by industry is essential for the recovery of management in vulnerable industries and the sustainability of the minimum wage system, and we request additional research and basic statistical data preparation at the government level."
They also expressed concern over the shock to the field due to the minimum wage increase. The Korea Federation of SMEs said, "The shock and side effects on the field will be considerable. In a business environment that is expected to be more negative than the current situation, the increase in labor cost burden will make it difficult to consider the continuation of employment and business," adding, "Ultimately, low-wage workers who lose their jobs may suffer damage from it."
Finally, they urged, "The government and the National Assembly should promptly prepare effective support measures to alleviate the management burden caused by the minimum wage increase and work on improving the system so that reasonable minimum wage decisions can be made in the future."

jimnn@fnnews.com Shin Ji-min Reporter