Why Did the Moon Jae-in Administration's Minimum Wage Policy Retreat?

This study analyzes the marked changes of the Moon Jae-in administration’s minimum wage policy from the perspective of discursive institutionalism. The minimum wage policy was one of the pillars of the ‘income-led growth,’ an alternative growth discourse of the administration, which took power in 2017. In response to the conservative government’s discourse based on the ‘trickledown effect,’ the communicative discourse on promoting growth by increasing labor income was supported by the public at the beginning of its administration. Due to this, the rate of increase in the minimum wage in 2018 compared to the previous year was 16.4%, the second highest ever. However, in the process, the government was relatively negligent in coordinated discourse to find a compromise with policy stakeholders such as companies, small business owners, and groups with disagreements within the government. These stakeholders were defined as opponents to confront, not policy partners. This led to the rally and opposition of the anti-policy coalition, and led to a discourse struggle over the effectiveness of the minimum wage policy. As a result, the persuasiveness of the government’s policy discourse had weakened. Since mid-2018, the government’s minimum wage policy drive had rapidly declined as indicators deteriorated. In the end, the minimum wage in 2020 rose only 2.8% from the previous year, and the government’s economic policy stance changed.