Biz body vows to challenge next year's minimum wage

A South Korean business lobby said Thursday it will file a complaint with the government against next year's minimum wage, which it says is too high.

The move comes days after a national commission composed of nine members each from labor, business and the general public set the new minimum wage at 9,160 won ($7.99) for 2022, up 5.1 percent from this year.

"A formal objection will be lodged with the labor ministry," said the Korea Enterprises Federation, which speaks for the business community. "The new minimum wage will threaten the survival of small companies and merchants struggling to overcome the coronavirus-induced crisis and have a negative impact on employment."

The federation claimed the country's minimum wage has been increasing excessively over the past five years during the Moon Jae-in administration.

The minimum wage has surged 41.6 percent over the period though it should have risen 15.6 percent, given the country's cumulative economic growth rate, consumer inflation and an increase in the number of employed people.

South Korea's cumulative economic growth rate amounts to 11.9 percent over the last five years, with consumer prices and the number of employed people climbing 6.3 percent and 2.6 percent, respectively.

"Should the new minimum wage proposal be finalized, most small companies and merchants will not be able to shoulder the burden of rising costs," the federation said.

By law, the commission is required to present the new minimum wage to the labor minister, who is then obliged to announce it publicly by Aug. 5. The new wage would then take effect Jan. 1.

South Korea's minimum wage grew 16.4 percent in 2018, 10.9 percent in 2019, 2.9 percent in 2020 and 1.5 percent this year, the lowest-ever on-year gain. (Yonhap)