Minimum Wage Rises by 2.5% for 2024

The meager increase is lower than the rate of inflation.

Minimum Wage Rises by 2.5% for 2024

Credit: Public domain.

On July 19, the Minimum Wage Commission 최저임금위원회, a joint commission comprising representatives of labor unions, corporations and the government, announced that the minimum wage for 2024 will be KRW 9,860 (USD 7.70) per hour, an increase of 2.5% from this year’s minimum wage of KRW 9,620 per hour. The 2.5% increase is the second-lowest since South Korea introduced the minimum wage in 1986, and lower than the current rate of inflation, which is 3.3%.

Although the new minimum wage largely represents a victory for corporations, the business community did not win everything. A proposal for a staggered-scale minimum wage, which would have provided for a lower minimum wage at certain businesses such as convenience stores or karaoke parlors, was narrowly defeated by a vote of 15 to 11.

The minimum wage is critically important for South Korean workers, who generally receive lower pay than their counterparts in comparable developed countries. As of 2022, the ratio of minimum wage to median wage in South Korea was 62.2%, one of the highest among developed countries - meaning that the median wage earner is relatively low-paid. More than 31% of all workers receive an annual salary that is at minimum wage or lower - roughly, KRW 24.7m (USD 19.2k) per year, including legally mandated benefits.

The minimum wage rose significantly during the Moon Jae-in 문재인 administration, which oversaw a 48.7% increase between 2017 and 2023. Nonetheless, Moon failed to keep his presidential campaign promise of a KRW 10k-an-hour minimum wage as small businesses, suffering from the effects of COVID-19, revolted against a significant raise. The lowest-ever increase in the minimum wage, 1.5%, came in 2021. The steady growth of South Korea’s minimum wage has been a significant factor in the country’s success in avoiding “Japanization”, or long-term stagnation. (See previous coverage, “Minimum Wage and Japanization.”)

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