The government will look into the impact of the minimum wage hike on employment, amid a heated debate over whether the increase is actually hurting entry level jobs and weighing down the local economy, the head of a special commission said Sunday.

Ryu Jang-soo, the chairman of Minimum Wage Commission under the labor ministry, said his commission will delve into the real impact of the 16.4 percent raise in the minimum wage on the local economy since it went to effect in January.

"The minimum wage is the most debated issue between employers and employees," Ryu told Yonhap News by phone. "It is important to make a framework through discussions, rather than setting a direction from the beginning.

Although it may be premature to analyze the new system's impact at this point, Ryu said his committee wants to play a mediating role between labor and management to better understand its ripple effect in the local economy.

Preaching an income-led economic expansion and a reduction of the pay gap between workers, the Moon Jae-in government increased the minimum wage for all workers by 16.4 percent this year to 7,530 won ($7) from 6,470 in 2017.

The government is determined to further raise the minimum wage in Asia's fourth-largest economy to at least 10,000 won by 2020 on the belief that it is time to break the economy away from an export-dependent growth path.

Critics argue, however, that the increased financial burden on small business owners is cutting the number of available jobs and leading to fast rise of food prices that is adversely hurting ordinary people.

In a recent poll by the Korea Food Service Industry Association, 80 percent of its members said they are planning to raise food prices due to worsening balance sheets.

Recent data showed that the number of people applying for unemployment benefits reached a record high during the first quarter of this year as some industrial sectors laid off workers to reduce costs.(Yonhap)