"SMEs and Small Business Owners Lack Capacity... Next Year's Minimum Wage Should Remain Frozen"

KCCI, Korea SMEs and Startups Agency, and Korea Federation of Micro Enterprises Jointly Issue Statement Ahead of Minimum Wage Commission Plenary Meeting

Jubo Won, Chairman of the Labor and Workforce Committee of the Korea Federation of Small and Medium Business, along with representatives from various sectors, held up hand-held placards urging the freeze of the minimum wage at the 2022 National Appeal Rally for Minimum Wage Freeze held on the 8th at the Korea Federation of Small and Medium Business in Yeongdeungpo-gu, Seoul. Photo by Hyunmin Kim kimhyun81@

[Asia Economy Reporter Yu Je-hoon] The Korea Employers Federation, the Korea Federation of Small and Medium Business, and the Korea Federation of Micro Enterprise Associations jointly requested on the 12th regarding next year's minimum wage decision, "We earnestly ask to minimize next year's minimum wage to a level equivalent to a freeze so that our companies can protect jobs and have time to recover."

The three organizations issued a joint statement ahead of the full meeting of the Minimum Wage Commission, stating, "Small and medium-sized enterprises and micro enterprises, the direct parties to the minimum wage, have no capacity to bear even a slight increase in the minimum wage due to the prolonged impact of COVID-19."

They appealed, "According to a survey by the Korea Federation of Small and Medium Business, 68% of small and micro enterprises are currently experiencing worsened business conditions, and 40% are struggling to pay wages normally. Moreover, due to the recent fourth wave of COVID-19, it is difficult to expect improvement in conditions in the short term."

They further emphasized that even this year's minimum wage is already at a level difficult to bear in the field. They said, "This year's minimum wage is 8,720 won, with a monthly salary of 1.52 million won, but the actual labor cost borne by companies, including weekly holiday allowances, is about 2.27 million won, which is 33% higher. Due to continuous increases that are difficult to accept in the field, according to the Korea Employers Federation, 3.19 million workers, accounting for 15.6% of all workers, are not receiving the minimum wage."

The three organizations also stated, "Due to the sharp increase in the minimum wage followed by the COVID-19 shock, 300,000 jobs in small and medium enterprises disappeared last year for the first time in 11 years, and this year, 68% of young job seekers are concerned about job reductions and hope for a freeze or reduction in next year's minimum wage." They concluded, "We once again earnestly request to minimize next year's minimum wage to a level equivalent to a freeze."