South Korea’s Minimum Wage Commission has set next year’s minimum wage at 10,320 won per hour, marking the first time in 17 years that labor, management, and public interest representatives have reached an agreement together. The decision is also the first minimum wage adjustment under the Lee Jae Myung administration.

The new hourly rate represents a 2.9 percent increase from this year’s 10,030 won. When converted to a monthly amount based on a standard 40-hour week, the new wage equals roughly 2,156,880 won.

A Narrow Path to Consensus

Negotiations began with a wide gap between labor and employer positions. Labor groups called for a rise to 11,500 won, a 14.7 percent increase, while employer representatives argued to keep the rate unchanged. With both sides unable to move closer, public interest commissioners proposed a compromise range between 10,210 won and 10,440 won.

Four commissioners from the Korean Confederation of Trade Unions walked out in protest at the proposal. Even so, discussions continued among the remaining members — nine public interest commissioners, nine employer representatives, and five worker representatives from the Federation of Korean Trade Unions — who eventually reached an agreement on 10,320 won.

This outcome marks only the seventh time the minimum wage has been set by direct labor-management agreement and the first instance since 2008.

A Modest First-Year Increase

The 2.9 percent adjustment is one of the smallest first-year increases under any administration. Only the 2.7 percent rise during former President Kim Dae-jung’s first year, at the height of the Asian financial crisis, was lower.

For context, initial minimum wage hikes under previous administrations were:

1. 7.96 percent under Kim Young-sam
2. 2.7 percent under Kim Dae-jung
3. 10.3 percent under Roh Moo-hyun
4. 6.1 percent under Lee Myung-bak
5. 7.2 percent under Park Geun-hye
6. 16.4 percent under Moon Jae-in
7. 5 percent under Yoon Suk Yeol

Next Steps

The commission has submitted its recommendation to the Ministry of Employment and Labor. After the formal objection period, the ministry is expected to confirm the final rate by August 5. The new minimum wage will come into effect on January 1, 2026.