The growth rate sharply slowed from a 10.9 percent rise for 2019 and is the slowest gain since the minimum wage for 2010 rose 2.8 percent.

The labor sector has vehemently protested the wage decision and asked the labor minister to launch the process needed to review it.

If either labor or business takes issue with a wage decision, the labor minister can ask the panel to deliberate more on it when the policymaker sees reasonable grounds for review.

The ministry's announcement was widely expected as the government has never called for the wage council to review a wage decision over the past 30 years.

A hike in the minimum wage is intended to increase income and consumption, and prop up the economic growth under President Moon Jae-in's signature income-driven growth policy. In his election pledges, Moon vowed to raise the threshold to 10,000 won by 2020.

But smaller firms and mom-and-pop stores responded to sharp hikes in the wage by dismissing part-time workers, thereby hampering job growth.

The labor sector angrily reacted to the 2020 wage decision, claiming that Moon's failure to keep his promise means the government has ditched its income-driven growth policy.

Vice Labor Minister Im Seo-jeong expressed regret that the decision fell short of the labor circle's expectations, vowing the government's efforts to support low income workers and ease financial troubles facing smaller firms. (Yonhap)