The Minimum Wage Commission held its first plenary session Tuesday to start negotiations to set the minimum wage for 2023, a highly sensitive issue for both labor and business that is also expected to set the overall labor policy tone of the incoming administration.

The minimum wage for this year is 9,160 won ($7.52) per hour, up 5.05 percent from 2021, after much wrangling between labor and business. Neither side was satisfied with the final result, as the gap was too wide to narrow.

Similarly, the Minimum Wage Commission, made up of 27 members, nine each from labor, business and the general public, is likely to struggle in the coming months to settle for a new minimum wage.

Although it is hard to predict how the commission will steer the tough negotiations by striking a balance in conflicting views between labor and business, the new administration, scheduled to launch May 10, appears to be learning toward a smaller hike in consideration of what has been revealed so far.

“Small and midsize business could go bankrupt if they are forced to pay the same minimum wage applied for conglomerates,” President-elect Yoon Suk-yeol said during the election campaign. “There are workers who are willing to work for pay that is less than the minimum wage.”

Yoon also mentioned the need to reform the related rules to allow different minimum wages for different regions and industries.

Han Duck-soo, the prime minister nominee, also lent his support to Yoon’s critical viewpoint Tuesday by opposing a dramatic hike in the minimum wage to avoid a situation where neither side benefits. “If the minimum wage goes up too much, companies tend to reduce their workforces, which will be a ‘lose-lose’ game,” Han said.

It is unlikely for labor and business to reach an agreement for the new rate. The labor side demands a higher increase, citing runaway inflation and widening income polarization. The business side claims the current minimum wage has risen to a burdensome level for small employers, many of which have already been hit hard by the protracted COVID-19 pandemic.

In fact, both sides have a valid point for the minimum wage, depending on how the issue should be weighed together with other related factors such as consumer prices, joblessness and the overall economic outlook.

In the past two decades, the minimum wage has risen at a brisk pace. Under the Kim Dae-jung administration that ran from 1998 to 2003, the average rate hike per year reached 9.0 percent. In the following years, the figures for former presidents Roh Moo-hyun, Lee Myung-bak and Park Geun-hye were 10.6 percent, 5.2 percent and 7.4 percent, respectively.

Under the current administration led by President Moon Jae-in, who pledged to raise the rate to 10,000 won during his election campaign, the average annual rate hike stood at 7.2 percent, little changed from his predecessor, who held a pro-business policy.

Increases in the minimum wage have clearly outpaced both the country’s economic growth and inflation. But it is difficult to say that the current minimum wage of 9,160 won per hour is set at an optimal level, considering that the country’s consumer prices jumped more than 4 percent for the first time in more than 10 years in March.

Setting a minimum wage is no easy task, especially at a time when the country confronts a slew of challenges. Both labor and business sides are urged to make concessions and seek a constructive compromise to bring a maximum level of benefits for all parties involved.