SME Sector "Minimum Wage Should Be Applied Differently"... Public Appeal (Comprehensive)

Press Conference Held at Korea Federation of SMEs on the 27th
Shouting Slogans Like "We Can't Endure Anymore"

The small and medium-sized enterprise (SME) sector has united in calling for the minimum wage to be applied differently for industries with weak payment capacity.

On the 27th, at the Korea Federation of Small and Medium Business in Yeouido, Seoul, during the "Press Conference Urging the 2025 Minimum Wage Decision Considering Payment Ability," participants are holding placards and shouting slogans.

On the 27th, the Korea Federation of SMEs held a press conference titled "A National Appeal Urging the 2025 Minimum Wage Decision Considering Payment Capacity" at the Korea Federation of SMEs headquarters in Yeouido, Seoul. The statutory review period for next year's minimum wage ends on this day.

At the press conference, Lee Jae-kwang, chairman of the Labor and Workforce Committee of the Korea Federation of SMEs, along with representatives from 10 industries, stated in their appeal, "In the first quarter of this year, sales and operating profits of small business owners decreased by 7.7% and 23.2%, respectively, and when an employee earns 1 million won, small business owners earn only 720,000 won." They added, "Given these business conditions, a significant number of small enterprises and small business owners with low payment capacity are unable to pay even the statutory minimum wage."

They continued, "More seriously, the proportion of workers not receiving the minimum wage varies by industry by up to 41.2 percentage points, indicating that the system does not function in industries with weak payment capacity and that protecting workers is difficult. Therefore, it is essential to consider not only income security for wage workers but also the payment capacity of small enterprises and small business owners in a balanced manner," they emphasized.

Holding placards with slogans such as "Implement differentiated application," "Bankruptcies and closures surge, even loan interest is burdensome," and "High minimum wage increases ultimately lead to inflation," they shouted slogans like "SMEs on the brink, we can't endure any longer."

Lee Myung-ro, head of the Workforce Policy Division at the Korea Federation of SMEs, said, "There is debate over whether the differentiated application method should be bottom-up or top-down, but our minimum wage is higher than the average of the G7 countries, the OECD, and countries that apply differentiated minimum wages, so it is difficult to apply the same method as other countries. If there is a shortfall in living expenses, the government’s role, such as expanding the Earned Income Tax Credit (EITC), is also necessary." The 'top-down' approach refers to setting industry-specific minimum wages lower than the basic minimum wage, while the 'bottom-up' approach allows certain industries to have minimum wages higher than the basic minimum wage.

Representatives attending to represent each industry continued their urgent appeals on site. Lee Sung-moon, director of the Korea Education IT Service Industry Cooperative, said, "Each industry has its own profitability, but ignoring this and raising the minimum wage across the board makes people seek only easy jobs, making it really difficult to find workers for positions that require even a little skill."

Sangbaek Sim, co-representative of the National Convenience Store Franchise Association, expressed difficulties at the "Press Conference Urging the 2025 Minimum Wage Decision Considering Payment Ability" held on the 27th at the Korea Federation of SMEs in Yeouido, Seoul.

Shim Sang-baek, co-representative of the National Convenience Store Franchise Association, said, "Convenience stores cannot raise sales prices even if labor costs increase, so to avoid losses, the owner has to work more, and they do not hire housewives or seniors who want to work part-time." He added, "Please set the minimum wage considering payment capacity so that small business sectors can survive."

During the Q&A session after the press conference, when asked, "What will you do if the vote on differentiated application is rejected?" Lee Myung-ro responded, "We will express our protest," and added, "The only option left is a single minimum wage, and we will try to persuade for it to be frozen or maintained as is."

According to the "Survey on Difficulties and Opinions Related to the Minimum Wage for SMEs" released by the Korea Federation of SMEs on the 3rd, 61.6% of SMEs responded that next year's minimum wage should be lowered or frozen. Regarding how to respond if the minimum wage is raised beyond a bearable level, 42.2% of SMEs answered "no countermeasures," and 35.0% answered "reduce new hires."