Minimum wage for next year 2026, agreement after 17 years

I. Introduction - Minimum Wage and Its Beyond Meaning

The minimum wage is not merely a system for determining the hourly wage level. It is a fundamental institutional mechanism aimed at protecting the economically disadvantaged and ensuring equity in the labor market. By establishing a baseline for monthly income based on legal working hours, it is directly linked to the livelihoods of individual workers, while also significantly impacting employer groups such as small business owners and self-employed individuals. Due to this nature, the annual minimum wage deliberation has been highlighted as one of the major sources of conflict in Korean society. Historically, the minimum wage has been determined through voting, largely due to the extreme differences in positions between labor and management, making consensus-based decisions rather exceptional. Within this structure, the agreement on the minimum wage for 2026 reached on July 10, 2025, by consensus among labor, management, and public interest members marks the first time in 17 years since 2008, representing a noteworthy social turning point in itself. It is essential to examine the background and process through which this agreement was reached, as well as the implications and controversies surrounding it.

II. Main Body 1 - Overview of Minimum Wage Determination for 2026

The minimum wage for 2026 has been set at 10,320 won per hour. This reflects an increase of 290 won from the 2025 minimum wage of 10,030 won, which translates to an increase rate of 2.9%. When calculated based on 209 hours, the monthly salary amounts to 2,156,880 won. While this may seem like a small increase at first glance, the decision on the minimum wage is the result of a comprehensive reflection of various factors, including economic growth rate, inflation rate, and the business conditions of small and medium-sized enterprises as well as small business owners. According to the Statistics Korea's supplementary survey on the economically active population, it is estimated that approximately 2.904 million workers will be affected by this minimum wage increase. This figure represents about 13.1% of all wage workers, indicating that the minimum wage increase is not a matter limited to a small minority. Additionally, by employment type, this system has a more significant direct and indirect impact on vulnerable groups such as non-regular workers, part-time workers, youth, and women, making it an area of greater policy interest.

III. Main Body 2 - The Process and Structure Leading to Agreement

This agreement was not simply reached due to a consensus between users and workers. Rather, it was a result that was painstakingly derived through the mediation and compromise of the public interest committee, which adjusted the long-standing gaps between the two sides' positions. The labor side initially demanded an hourly wage of 11,500 won but revised it to 10,900 won, while the employers softened their initial position of freezing wages to 10,180 won. However, the gap between the two sides remained, and the 'facilitation zone' proposed by the public interest committee became a clue for compromise. The facilitation zone proposed by the public interest committee was between 10,210 won and 10,440 won. This was higher than what the employers demanded and lower than the revised proposal from the workers. However, even this range was not accepted by the labor representatives from the Korean Confederation of Trade Unions, who argued that it was overly centered on the employers and did not reflect the actual inflation rate, leading them to exit the discussion entirely. Consequently, the final agreement was reached in the absence of the Korean Confederation of Trade Unions, among the workers' representatives from the Korean Federation of Trade Unions, the employers' representatives, and the public interest committee members. The Minimum Wage Commission consists of a total of 27 members, with an equal distribution of 9 representatives from workers, employers, and public interest representatives. The final agreement involved 23 participants who reached a conclusion through consensus rather than a vote. Legally, the review of the minimum wage must be completed within 90 days of the Employment and Labor Minister's request for deliberation. However, this time, the conclusion was reached on July 10, exceeding the legal deadline of June 29, resulting in a total deliberation period of 101 days. Such procedural delays have been recurring every year, and there have been ongoing calls for institutional improvements.

IV. Main Body 3 - The Agreement After 17 Years, Its Meaning and Background

Since 2008, the determination of the minimum wage has been largely decided through votes for and against. This highlights the limitations of the system, as areas that should have been adjusted through social dialogue have ultimately ended in confrontation and conflict. In this regard, the decision on the minimum wage for 2026 is evaluated as an important turning point, not merely a matter of amounts, but as a symbol of social consensus and an opportunity to restore institutional trust. The public interest committee explained, 'Decisions made by consensus are the result of coordination and reconciliation, rather than exclusion and forced choice.' While both labor and management had internal disagreements, it is significant that a decision was made at a certain level for social integration. The business sector also acknowledged the political weight of the agreement, stating, 'We made a difficult decision amid domestic recession and employment insecurity.' The government evaluated it as 'significant, given that it is the first agreement in 17 years since 2008, and an opportunity to restore trust in social dialogue.'

V. Main Body 4 - Divergent Reactions and Controversies

Just because an agreement was reached does not mean that everyone is satisfied. In particular, the Korean Confederation of Trade Unions expressed strong opposition. From the moment they exited, they protested strongly, stating that "the increase, which does not even meet the inflation rate, results in a decrease in workers' real wages," and later issued a statement asserting that "this decision is not a substantive negotiation, but a unilateral agreement centered on the government and employers." The Korean Confederation of Trade Unions is forecasting future struggles, including a general strike, and insists that it cannot accept this decision. The Korean Trade Union Congress also stated that "negotiations were held, but the results are unsatisfactory." They specifically emphasized the government's role, saying, "If there are no supplementary measures to compensate for living costs, this minimum wage will be unlikely to have an effect." The employer side has fundamentally maintained a negative stance towards the increase itself, but described this agreement as a 'grand judgment,' emphasizing the minimization of social conflict. Differential application by industry or the expansion of coverage for atypical workers and platform workers was not implemented this time either. This issue is discussed every year, but practical institutionalization has not been achieved, remaining an important task for institutional improvement. Particularly, with the spread of platform-based labor, the expansion of minimum wage application is becoming an unavoidable social demand.

VI. Conclusion - Challenges Greater Than Numbers

The decision on the minimum wage for 2026 carries a symbolic meaning that goes beyond the mere figure of a 290 won increase. The agreement reached between labor and management after 17 years is a testament to the progress our society has made from confrontation and conflict to dialogue and compromise. However, this agreement also reveals the reality that it is not a final conclusion, but rather an indication that more intense and refined discussions are necessary in the future. In a situation where real wages are declining, a low increase rate can make it difficult for the labor sector to regain trust in the system. At the same time, excessive increases can impose a direct cost burden on small and medium-sized enterprises and small business owners, potentially leading to employment reductions or restructuring. To resolve this dilemma, an integrated approach is needed that goes beyond simply determining wage levels, including strengthening the social safety net, ensuring employment stability, and supporting small and medium-sized enterprises. Ultimately, the decision on the minimum wage is a social commitment that impacts people's lives, not just a number. The agreement is merely the first step in restoring trust in the system, and we must move toward a structure that everyone can accept through more transparent and inclusive processes and social dialogues. The challenge for the minimum wage system, which must contain values greater than numbers, begins again now.