The Korea Enterprises Federation (KEF) issued a report Wednesday recommending that next year's minimum wage be differentiated by industry.
In the report titled "The Necessity and Implications of Industry-Based Minimum Wage Application," the KEF pointed out that some industries, including the restaurant business, struggle to bear the minimum wage, sharply reducing its acceptability.
As evidence, the KEF cited value added per employed person, the minimum wage relative to the median wage, and the proportion of workers paid below the minimum wage. Last year, value added per employed person in the accommodation and food service industry stood at 28.45 million won, just 17.1% of the manufacturing sector's 166.69 million won and 16.2% of the finance and insurance sector's 175.61 million won.
The ratio of the minimum wage to the median wage also reached 87.1% in the accommodation and food service industry, while the finance and insurance sector recorded a level in the 40% range. The KEF noted that the Organization for Economic Cooperation and Development (OECD) and the International Monetary Fund (IMF) have warned that an excessively high minimum wage relative to the median wage could produce negative effects such as job losses.
The proportion of workers not receiving the legal minimum wage also varied widely by industry. While the figure was 3.7% in manufacturing and 6.1% in finance and insurance, it reached 31.6% in the accommodation and food service industry. The sub-minimum rate in accommodation and food services rose sharply from 6.4% in 2001 to 31.6% in 2025. The KEF explained that "this shows the current minimum wage in this industry has diverged from the actual ability to pay on the ground."
The business community has been calling for industry-based minimum wage differentiation for several years. Last year, it again proposed the restaurant business as a target for differentiated application during discussions at the Minimum Wage Commission.
According to the KEF, the minimum wage rose 437.8% from 1,865 won in 2001 to 10,030 won in 2025, 5.7 times the inflation rate (77.4%) and 2.5 times the nominal wage growth rate (174.7%) over the same period.
The KEF argued that 21 OECD member countries differentiate the minimum wage by industry, age, or region, and that Korea should also enhance the system's practicality through industry-based differentiation. Switzerland applies a level lower than the general minimum wage to agriculture and floriculture. Ten countries, including the United Kingdom, France, and Canada, apply a lower minimum wage than for general workers to specific age groups.
Unlike major advanced countries that differentiate the minimum wage based on various criteria, Korea allows only industry-based application under the Minimum Wage Act.
"Applying the same minimum wage uniformly to all industries, when the ability to pay and productivity differ greatly by industry, does not sufficiently reflect reality," said Ha Sang-woo, a director at the KEF. "For industries that struggle to bear even the current minimum wage, we should enhance the system's acceptability on the ground through differentiated application."
