As the 2027 minimum wage was set at 10,700 won per hour, up 3.7% from this year, small and midsize businesses and self-employed groups expressed regret in unison, saying the burden of management will grow.
Korea Federation of Micro Enterprise (KFME) said in a statement on the 14th that it was "a decision that ignored the desperate reality of self-employed people who are hanging on day by day amid the largest-ever liability and an economic downturn," adding, "An additional hike in the minimum wage has placed yet another burden on the self-employed."
The Minimum Wage Commission held its 14th plenary session at the Government Complex Sejong that day and set the 2027 minimum wage at 10,700 won per hour. That is 380 won, or 3.7%, higher than this year's 10,320 won. Based on a 40-hour workweek and 209 hours a month, the monthly wage comes to 2,236,300 won. The increase is 1 percentage point higher than this year's consumer price inflation outlook of 2.7%.
KFME said it was concerned that the wage cost burden would deepen management difficulties, as the increase exceeds inflation. It argued that the hike could place a considerable burden on self-employed people already at their limits due to the "three highs" of high inflation, high interest rates, and a strong dollar, and a slump in domestic demand.
The small and midsize business community also expressed disappointment. The Korea Federation of Small and Medium Enterprises said, "Despite rising exports and improved performance at large corporations, on-the-ground conditions for small and midsize businesses and the self-employed remain difficult due to a domestic slump and higher prices," adding, "Small and midsize businesses and the self-employed have called for sector-specific application of the minimum wage and for cuts or a freeze in the minimum wage."
It added, "This minimum wage decision, which exceeds the payment capacity on the ground, has disappointed small and midsize businesses and the self-employed," and said, "Micro firms and the self-employed at the brink will cut jobs or shut down due to excessive labor costs, and the pain will ultimately fall on vulnerable workers."
KFME and KBIZ also voiced regret that sector-based differentiated application of the minimum wage fell through. KBIZ said, "To create a sustainable minimum wage system, sector-based differentiated application must be implemented, and the decision criteria must be swiftly improved to reflect the payment capacity of corporations."