Korea's Wage Guarantee Fund Faces 1.2 Trillion Won Burden by 2030

* Editor's note: AI PRISM (Personalized Report & Insight Summarizing Media) is an AI-based personalized news recommendation and summary service developed with support from the Korea Press Foundation. It selects and provides six news items tailored to each reader type.

1. [Exclusive] 1.2 Trillion Won by 2030: Wage Subsidy Fund Faces Depletion

Key points: The recovery rate for the wage subsidy program, under which the state pays unpaid wages on behalf of insolvent employers, fell from 32.8% in 2020 to 29.7% in 2025, while reserves in the Wage Claim Guarantee Fund plunged from 834 billion won to 276.5 billion won over the same period. With coverage for insolvency-related subsidies expanding from the final three months to six months of unpaid wages starting on the 20th of this month, fiscal spending is expected to swell from 742.1 billion won this year to 1.2034 trillion won in 2030. The employer contribution rate was raised from 0.06% to 0.09%, but analysts say that is not enough to cover the growing burden. New employees at companies at risk of insolvency should familiarize themselves in advance with the requirements and procedures for claiming the subsidy.

2. Linking Korean and Japanese Labor Markets to Address Low Birth Rates

Key points: The share of unmarried young Koreans who intend to marry stood at 81.4%, higher than Japan's 57.6%, but respondents in both countries ranked "stable employment and income" first among preconditions for marriage — 51.8% in Korea and 41.1% in Japan — confirming a shared emphasis on economic security. The Korea Chamber of Commerce and Industry has launched a Korea-Japan exchange committee on responding to low birth rates, jointly with the Japan Chamber of Commerce and Industry and the Japan Productivity Center, and is working out plans to link the two labor markets, including changes to visa rules, qualification recognition and social insurance systems. KCCI Chairman Chey Tae-won stressed the importance of mutual recognition of qualifications and work experience to expand jobs for young people, and also emphasized maximizing youth productivity through the use of AI. If the two labor markets open up, new employees would gain new career paths such as overseas employment and workcations.

3. Grocery Prices Hit Low-Income Households Hardest as Food Costs Jump 6.9%

Key points: Average monthly food spending by households in the second income quintile came to 656,530 won in the second quarter, up 6.9% from a year earlier, with food accounting for 27.2% of total household spending. Prices for staple ingredients rose across the board, including rice at 13.2%, potatoes at 11.1% and green onions at 10.0%, while cheap dining options such as triangle rice balls, jajangmyeon and hangover soup rose 3.8% to 4.0%, adding to the real impact. The Korea Institute for Economy and Industry has warned that food prices could surge further if heat waves and heavy rain in August and September coincide with demand ahead of the Chuseok holiday. New employees earning starting salaries face the tightest squeeze on living expenses as spending on food, a necessity, rises.

4. [Exclusive] Amid Heavy Workloads and Pay Complaints, 30 Investigators Left Each Month

Key points: The number of departures from police investigative units jumped 54.7% in four years, from 265 in 2021 to 410 last year, with nearly 30 investigators leaving the organization each month on average over the past five years and seven months. Criminal complaints filed at police stations nationwide surged from 452,000 in 2023 to 718,000 last year, pushing the caseload per investigator up 32.7%, from 101 to 134 cases. Police added about 1,900 personnel to investigative units over a year, but most were reassignments of existing staff, which critics say does not fundamentally address the gap left by the departure of experienced investigators. The case illustrates the early-departure pressure that new employees in public-sector jobs may face if working conditions and workloads do not improve.

5. From Demands to Halt Asset Sales to Executive Pay: "Administrative Guidelines Alone Cannot Prevent Confusion"

Key points: Since the revised Trade Union Act, known as the yellow envelope law, took effect, union bargaining demands have spread across areas long considered management prerogatives, including halting sales of business divisions and subsidiaries, direct hiring by prime contractors, performance pay equal to that of prime contractor employees, and disclosure of executive compensation standards. The government plans to release enforcement guidelines early next month clarifying the scope of labor disputes, but concerns have been raised that administrative guidelines without legal binding force cannot resolve confusion on the ground. Labor-management conflict could affect organizational restructuring and performance pay systems at the companies where new employees work, making it worth tracking changes in labor-related rules.

6. Workforce Reassignment Is a Management Call in the U.S. and U.K., a Dispute Card in Korea

Key points: With the largest union at Samsung Electronics (005930) declaring it will take up the construction of a new plant as a bargaining item in 2027 talks over an 800 trillion won semiconductor cluster in the Honam region, disputes extending even to workforce reassignment are becoming a reality. Major economies including the United States, the United Kingdom, Japan and Germany treat business restructuring and capital investment as matters of exclusive management authority, while in Korea the revised Trade Union Act has created an interpretive gap by including "management decisions that affect working conditions" within the scope of labor disputes. The Ministry of Employment and Labor has begun drafting enforcement guidelines, but it remains unclear whether guidelines alone, without a revision of the enforcement decree, can clearly delineate the boundary between management rights and labor rights. New employees in fields involving large-scale investment projects such as semiconductors and manufacturing, or in occupations with frequent reassignments, should keep an eye on developments.