Convenience Store Owners' Cry: "Working 50 Hours a Week, Income Only 1 Million Won"

Worse Than Part-Time Workers Reality
20% of Convenience Stores Are Operating at a Loss
Minimum Wage Must Be Reduced to Overcome Crisis

Officials from the Korea Convenience Store Owners Association are holding a press conference urging a reduction in the minimum wage on the 2nd at the Korea Federation of SMEs in Yeongdeungpo-gu, Seoul. Photo by Kim Hyun-min kimhyun81@

[Asia Economy Reporter Lim Hye-sun] Kim Jeong-ho (alias, 49), who has been running a convenience store in Gangseo-gu, Seoul for three years, is recently considering closing his business due to a sharp decline in profits. Sales have dropped by more than 20% due to the impact of the novel coronavirus infection (COVID-19), making it difficult to operate the store without reducing part-time workers. He has to work alone at all times except for weekday and weekend night part-timers to earn a net income of about 3 million won per month. If the minimum wage rises to 10,000 won next year, profits are expected to decrease further due to increased labor costs. Kim said, "I am enduring by reducing part-time workers and working alone due to COVID-19, but if the minimum wage rises next year, it will be practically impossible to operate the store," adding, "I regret entering the self-employment front when I should have stayed at the company despite the awkwardness."

Convenience store franchise owners have opposed the labor sector's proposal of a "10,000 won minimum wage for next year." Since the economy has worsened after COVID-19, if the labor sector's proposed "10,000 won minimum wage" is accepted, the burden of labor costs will inevitably increase.

Recently, convenience store franchise owners held a press conference at the Korea Federation of Small and Medium Business in Yeouido, Seoul, demanding, "Reflect the reality of self-employed people pushed to the brink and reduce the minimum wage so that all economic actors can overcome the crisis together." Representatives of the store owners' councils and franchise owners from CU, 7-Eleven, and Emart24 attended the press conference.

The owners claimed, "There are convenience store owners who earn less than part-timers," and "Last year, the average annual sales of convenience store franchises did not even reach 580 million won. Based on this sales figure, if an owner works 50 hours a week, the monthly income is less than 1 million won, which is below the minimum wage." They continued, "More than half of convenience store owners earn only half of the monthly minimum wage," and lamented, "20% of convenience stores are loss-making stores that cannot even pay labor costs and rent."

According to the Korea Convenience Store Owners Association, with a 32.7% increase in the minimum wage over the past three years, small business owners including convenience stores have reached the limit of their ability to pay the minimum wage. So far, convenience store owners have increased their working hours to pay the minimum wage even if they themselves do not earn much. Working 70 to 80 hours per week is common, and many owners even involve their families to work over 100 hours.

The owners said, "We have now reached the limit where we can no longer increase working hours," adding, "We do not have the ability to pay the minimum wage. The only options left are to become lawbreakers by not paying the minimum wage or to close the business."

There were also claims that the minimum wage increase leads to a decrease in short-term jobs. The owners said, "Due to the minimum wage increase, night operations have been stopped or owners have increased their own working hours, resulting in a significant reduction in jobs," and "If the economic recession caused by COVID-19 prolongs or the minimum wage increases, the jobs that have been maintained will be further reduced."

They added, "In addition to the structural problems of the market, due to the rapid increase in the minimum wage, the rate of small business owners earning below the minimum wage reaches 30 to 40%," and "There is no more capacity to endure."

Accordingly, the owners reflected the economic crisis caused by the prolonged COVID-19 situation and urged for ▲ a 2.87% reduction in the minimum wage (the previous year's increase) ▲ abolition of weekly holiday pay ▲ differentiation of the minimum wage by industry and business size so that self-employed people and workers can coexist.