2023 MINIMUM WAGE RAISED BY 5%

[Anchor Lead]

The minimum wage for 2023 has been raised by 5 percent from this year. But neither labor nor management are willing to accept the decision. They say the amount is too low given the inflation rate.

[Pkg]

The minimum wage for 2023 has been set at 9,620 won per hour, a 5 percent increase from this year. That translates into a monthly wage of 2,010,580 won. The decision was reached on Wednesday evening after eight rounds of negotiations. The public interest members of the minimum wage committee proposed the hourly wage of 9,620 won at around 10 p.m. as the labor and management sides could not narrow their differences. Four labor representatives from the Korean Confederation of Trade Unions and nine representatives from the employers' side refused to accept the decision and left the venue of the talks. The employer members left after the decision had been announced, technically abstaining from the vote. The final result of the vote: 12 in favor, 10 abstained, and one against. The 5-percent raise is lower than the double-digit increases in 2018 and 2019, but it is higher than the 2.9-percent and 1.5-percent raises in 2020 and 2021, respectively. The public interest members of the minimum wage committee added that the decision is based on the economic growth outlook of 2.7 percent, the inflation rate forecast of 4.5 percent, and the employment increase rate of 2.2 percent.

[Soundbite] Kwon Sun-won(Minimum wage committee) : "We took into account the inflation rate as an important factor in guaranteeing the actual living cost."

When asked if the decision was made hastily to meet the legal deliberation deadline, which was Wednesday, the members replied they didn't think it'd be sound to add risk to the state of the economy by postponing the decision on minimum wage. Both labor and management strongly blasted the decision. The labor side says a 5-percent raise is not enough to cope with the rising inflation and will only exacerbate inequality and income polarization. Management says small businesses and SMEs have already hit a limit in paying their employees amid rising costs. The finalized minimum wage rate for 2023 will be announced by August 5 after the period of formal objection, and will take effect next January.