Korea Federation of SMEs States Position on Minimum Wage
Small and medium-sized business owners expressed concerns about job losses due to rising labor costs and called for freezing next year's minimum wage at 9,620 won.
The Labor and Workforce Committee and the Special Minimum Wage Committee of the Korea Federation of SMEs held a press conference on the 3rd at the Federation's office in Yeouido to state their position on the 2024 minimum wage. The event was organized to urge a reasonable decision on the minimum wage ahead of the full meeting of the Minimum Wage Commission scheduled for tomorrow (the 4th).
They reported that companies are facing critical situations due to the economic downturn, increases in public utility charges, and soaring production costs caused by high inflation. They also expressed concerns that the sharp rise in labor costs would lead to increased automation and unmanned stores, resulting in reduced employment.
They revealed that over the past decade, the minimum wage increase rate has doubled, reaching the limit of acceptance in the field, and that 2.76 million workers did not receive the minimum wage last year. In particular, considering the weekly holiday allowance, the effective minimum wage amounts to 11,500 won per hour, urging that the minimum wage be maintained at the current level.
Song Yoo-kyung, president of the Korea Supermarket Cooperative Federation, said, "The weekly holiday allowance, which further increases the burden of the minimum wage, is difficult to bear, leading to increased use of ultra-short-hour workers," adding, "Companies face personnel management risks, and workers find it harder to secure stable jobs."
Min Seon-hong, director of the Korea Digital Printing and Copying Cooperative, expressed concern, saying, "Due to the sharp rise in labor costs, the industry is increasingly interested in automation such as robotic arms," and "The expansion of automation and unmanned stores will eventually reduce employment."
Lee Oh-seon, director of the Busan Clean Surface Treatment Cooperative, stated, "Skilled workers are disappearing on site due to the minimum wage increase," and warned, "If the situation where unskilled workers cannot be given opportunities continues, aging of the workforce and shortage of skilled personnel are expected."
According to a recent survey, seven out of ten small and medium-sized enterprises said they would reduce employment if the minimum wage is raised. Lee Jae-kwang, chairman of the Labor and Workforce Committee of the Korea Federation of SMEs, emphasized, "Next year's minimum wage should be decided at a freeze level to ensure the survival of businesses and the creation of more jobs."
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