Next Year's Minimum Wage Surpasses 10,000 Won... SMEs and Small Business Owners Say "Big Shock"

Next Year's Minimum Wage Rises 1.7% to 10,030 Won
Small and Medium Enterprises and Small Business Owners Say "Labor Cost Burden Will Increase"

Next year's minimum wage has surpassed 10,000 won, and organizations representing small and medium-sized enterprises (SMEs) and small business owners expressed regret, saying "the situation will become more difficult."

On the 12th, the Minimum Wage Commission decided that next year's minimum wage will be 10,030 won, a 1.7% increase from this year. In this regard, the SME and small business sectors predicted that the labor cost burden on small self-employed businesses, which are already at their limits, will increase further.

As small business owners continue to face management difficulties amid high inflation, the expansion of support funds for small businesses has become urgent. On the 28th, empty storefronts were seen scattered throughout the commercial area near Ewha Womans University in Seodaemun-gu, Seoul. Photo by Kang Jin-hyung aymsdream@

Namsoo Cha, Head of Policy and Public Relations at the Korea Federation of Small and Medium Business, said, "For small business owners, the difference between the four-digit 9,000 won range and the five-digit 10,000 won range is significant," adding, "It will be a factor that reduces consumers' purchasing motivation."

He continued, "The increase to the 10,000 won level in the minimum wage blocks the path for vulnerable workers and small business owners to coexist amid growing risks such as arrears, business closures, and increased loans," expressing concern that "it is especially a huge shock to vulnerable small business owners."

Myungro Lee, Head of Human Resources Policy at the Korea Federation of SMEs and a user member of the Minimum Wage Commission, also said, "The SME sector requested a freeze, so this is not a situation to welcome," and predicted, "Since the absolute level has already risen and accumulated, even a slight increase will make the situation very difficult."

He also expressed regret again over the rejection of sector-specific application when setting the minimum wage and urged the establishment of plans to secure national statistics for next year's discussions.

Head Lee emphasized, "At this year's meetings, we requested sector-specific application for at least three industries, including convenience stores, restaurants, and taxi transportation, but the public interest members raised issues, saying there was insufficient evidence," adding, "The government should conduct research to determine whether such requests are reasonable."

Muho Son, Director of Policy Development at the Korea Foodservice Industry Association, lamented, "It is already difficult to find workers in the foodservice industry, and wages are being paid at 11,000 to 12,000 won per hour, but with the minimum wage exceeding 10,000 won, wages may need to be raised to 13,000 to 14,000 won."