Deliberations on the minimum wage have again exceeded the legal deadline this year. As failure to reach agreement within the deadline amid tense standoffs between labor and management repeats every year, the structural limits of the Minimum Wage Commission's composition and its wage-setting method are once again under scrutiny.
The minimum wage system was introduced in January 1988, based on the "Minimum Wage Act" enacted in December 1986. In its first year of implementation, it applied only to manufacturers with 10 or more workers, but its scope was gradually expanded, and since 2000 it has applied to all workplaces. Based on the law's enactment, the system marks its 40th year this year, yet its operating method has changed little despite shifts in the labor market, drawing persistent criticism as an "outdated system."
The current commission consists of 27 members in total—nine worker representatives, nine employer representatives, and nine public-interest members. Worker representatives are recommended by the two umbrella union groups, including the Korean Confederation of Trade Unions (KCTU) and the Federation of Korean Trade Unions (FKTU), while employer representatives are recommended by employer groups such as the Federation of Korean Industries, the Korea Federation of SMEs, and the Korea Federation of Micro Enterprise. This structure originated from placing labor and management in equal numbers, based on political considerations following the massive workers' strike of 1987. In effect, it was designed from the outset as a confrontation between camps rather than a framework for labor-management agreement.
As a result, a structure has become entrenched in which labor and management repeat wasteful conflict every year, exceed the legal deadline, and ultimately conclude through a vote by the public-interest members who represent the government side. Since the system's introduction, the legal deadline has been met on only nine occasions. Cases decided by labor-management agreement number just eight, including the 2026 minimum wage.
The ambiguity of the decision criteria is also a problem. Article 4 of the current Minimum Wage Act lists factors to be considered, such as workers' living costs, the wage levels of similar workers, labor productivity, and income distribution rates, but it lacks the crucial priorities or weighting standards. Key economic indicators such as economic growth rate, inflation rate, and the effect on employment are not subject to legal consideration either. Without clear standards, only emotional wrangling repeats each year, and data-based deliberation remains far off.
The issue of representation among worker representatives centered on the two umbrella unions is also worth examining. The overwhelming majority directly affected by the minimum wage are women, young people, and workers at small businesses. According to the Ministry of Employment and Labor and the Korea National Data Agency, among workers earning minimum-wage-level pay, women account for 62 percent, those in their 20s or younger 22 percent, and workers at small businesses with fewer than five employees 42 percent. By contrast, Korea's union organization rate stood at only 13 percent of all workers as of 2024. Moreover, the KCTU is anchored by regular workers in the public sector and large corporations, while the FKTU is anchored by regular workers at large corporations and in the financial sector. Under these conditions, it is difficult to view the two umbrella unions as fully representing vulnerable workers.
Nevertheless, the two umbrella unions have presented an initial proposal for next year's minimum wage of 12,000 won per hour, a 16.3 percent increase from this year, and are pressuring the employer side by linking it to the threat of a general strike on the 15th. Criticism has emerged that while they present the improvement of low-wage workers' conditions as their justification, they are in reality trying to push through the political interests of the two umbrella unions, which are centered on regular workers at large corporations.
Criticism that the minimum wage decision structure must change has been ceaseless, but neither the government nor the National Assembly has brought about substantial change. Various measures, such as introducing a National Assembly recommendation system or establishing a separate body, have been submitted as bills, but no conclusion has been reached, citing conflicts of interest. In the end, the commission has been reduced to a structure relying on a vote by public-interest members rather than a body that draws out social consensus.
The minimum wage is not an object of a power struggle between labor and management, but a last safety net to protect the most vulnerable low-wage workers in our society. Before it is too late, the commission's composition and the minimum wage decision method must be fully overhauled. Reorganizing the 27-member system that fuels camp confrontation and enhancing expertise is a realistic alternative. In particular, representation must be restored by diversifying the recommendation rights for worker representatives from the two umbrella unions to the groups actually affected by the minimum wage, such as non-regular workers, platform workers, and young people.
Above all, the most important task is to build a predictable minimum wage decision system. Establishing objective standards that reflect prices, economic growth rate, and employment conditions could significantly reduce the wasteful debate that repeats every year. Although it fell through this year, a plan for sector-by-sector application that considers ability to pay must also be prepared. The current method of applying the same standard to all regions and sectors is a burden on both small self-employed business owners and vulnerable workers. Institutional supplementation reflecting regional and sectoral characteristics, as done abroad, is urgently needed. It is hoped that the minimum wage system will escape its outdated conflict structure and be reborn as a system in which workers and businesses thrive together.
