Jungdanhyeop Appeals "Next Year's Minimum Wage Must Be Frozen"

Over 30% Increase in the Past 3 Years Causes Severe On-Site Burden
Concerns Over Business Survival Amid Added COVID-19 Impact

Kim Ki-moon, President of the Korea Federation of Small and Medium Business (center), and heads of organizations affiliated with the Council of Small and Medium Business Associations are announcing their position on the necessity of freezing next year's minimum wage at an emergency press conference held on the 7th at the Korea Federation of Small and Medium Business in Yeouido, Seoul.

[Asia Economy Reporter Kim Daeseop] The Small and Medium Business Association held an emergency press conference on the 7th at the Korea Federation of SMEs in Yeouido, Seoul, appealing that next year's minimum wage must be at least frozen. They requested cooperation from labor unions and the government to protect workers' jobs amid the crisis where small and medium-sized enterprises (SMEs) are contemplating the survival of their businesses due to damages caused by the spread of the novel coronavirus infection (COVID-19).

At the press conference, 15 SME organizations including the Korea Federation of SMEs, the Korea Association of Small and Medium Business Technology Innovation, and the Korea Women Entrepreneurs Association participated to announce the SME sector's stance on the '2021 Minimum Wage.'

Kim Gi-moon, Chairman of the Korea Federation of SMEs, stated in his opening remarks, "The minimum wage has risen by more than 30% over the past three years, reaching a level that is already difficult to bear on the ground. On top of this, the shock caused by COVID-19 has weakened the basic strength of SMEs, which are now facing the dilemma of whether to continue their businesses," adding, "Workers are also anxious about potentially losing their jobs due to the minimum wage increase, so next year's minimum wage must be decided at a level that can save SMEs and protect workers' jobs."

The Small and Medium Business Association emphasized in their statement that SMEs and small business owners are going through a more difficult time than ever due to the COVID-19 pandemic. They particularly voiced concerns about the burden caused by the sharp increase in the minimum wage.

Kim Ki-moon, Chairman of the Korea Federation of Small and Medium Business, attended an emergency press conference held at the Federation's office in Yeouido, Seoul, on the 7th, discussing the management difficulties faced by small and medium enterprises and small business owners due to the rapid increase in the minimum wage.

The association stated, "This year's minimum wage is 8,590 KRW per hour, and including the weekly holiday allowance, the monthly salary is 1.8 million KRW. However, the actual labor cost paid by employers, including statutory costs such as the four major social insurance premiums and retirement reserves, reaches 2.23 million KRW per month. In this situation, SMEs and small business owners are barely holding on with various loans and government subsidies, and it is very difficult."

They continued, "Now, to restore economic vitality, all parties?labor, management, and government?must prioritize protecting jobs. To save SMEs and protect workers' jobs, next year's minimum wage must be at least frozen. Although the SME sector is fighting for survival, we will do our best to protect workers' jobs."

According to the Korea Federation of SMEs, many on-site businesspeople worry that the impact of COVID-19 is much more severe than the 1997 foreign exchange crisis or the 2008 global financial crisis. In the '2021 Minimum Wage Related SME Worker Opinion Survey,' 88.1% of SME business owners and 56.7% of workers responded that next year's minimum wage should be frozen or lowered.