Next Year's Minimum Wage Set at 10,700 Won, Pushing Monthly Pay Above 2.2 Million Won; Small Business Owners Say, "Automation Would Be Better"

[Financial News] Next year's minimum wage has been set at 10,700 won per hour. That represents a 3.7% increase, or 380 won, from this year's minimum wage. On a monthly basis, it comes to about 2,236,300 won, based on a 40-hour workweek and 209 hours a month. That is nearly 80,000 won more than this year's monthly equivalent.
Both labor and management expressed "regret" over the decision. Business groups also said they were disappointed that no separate minimum wage was applied by industry. Small business owners, who will feel the impact most directly, voiced strong concern that it would be difficult to absorb a minimum wage exceeding 2.2 million won a month, citing rising labor costs.

According to the government on the 15th, the Minister of Employment and Labor will decide by the 5th of next month whether to formally approve the new minimum wage.
The Minimum Wage Commission held its 14th plenary session at Government Complex Sejong the previous day and finalized the rate after reviewing the 2027 minimum wage level. Labor and management narrowed their positions to 10,770 won and 10,640 won in the 12th revised proposals, but with no clear compromise in sight, public-interest members put the matter to a vote and adopted the business community's final proposal as next year's minimum wage.
The finalized proposal will be submitted to the Minister of Employment and Labor. If the minister decides it is difficult to accept, the ministry may, within 20 days and with reasons stated, ask the Minimum Wage Commission to reconsider the decision for a period of at least 10 days.
Still, both labor and management described the new minimum wage as "regrettable."
Lee Mi-seon, vice chair of the Federation of Korean Trade Unions (FKTU), also criticized the outcome, saying, "The compromise proposal suggested at the end by the public-interest members is deeply disappointing," and added, "I believe the public-interest members have been thoroughly representing the business side."
The Korea Enterprises Federation (KEF), the Federation of Korean Industries, and the Korea Chamber of Commerce and Industry (KCCI) said the new minimum wage would increase the management burden on small merchants and self-employed workers. They also stressed the need for institutional reforms, noting that no separate application by industry was introduced.

In a statement, the Korea Federation of Micro Enterprises (KFME) said it could not hide its deep regret and sense of emptiness over a decision that ignored the desperate appeals of 7.9 million small business owners, criticizing the minimum wage that has now surpassed 2.2 million won a month.
A restaurant owner in Jongno District, Seoul, said he plans to stop late-night operations next year and run the store only with his spouse. "Nothing has gone down, including ingredients, delivery fees, and rent," he said. "Now that labor costs are rising too, I really can't even think about hiring people."
A barbecue restaurant owner in Gangnam District, Seoul, also lamented the wage increase, saying, "Starting next year, I may have to cut staff even for weekday shifts and keep the store running by myself." A restaurant owner in Jung-gu, Seoul, added, "There will be upfront machine rental costs and maintenance fees, but if you consider the labor costs paid every month, automation seems far more profitable than hiring people, so I'm now thinking about introducing new equipment."
hjkim01@fnnews.com Kim Hak-jae Kim Seo-yeon Kim Jun-hyeok Lee Dong-hyeok Reporter