87% of Small Business Owners Say Current Minimum Wage Is a Burden; 38% Plan to Reduce Hiring

More than 8 out of 10 small business owners feel that the current minimum wage of 10,320 won is a significant burden, a survey has found.

The Korea Federation of Micro Enterprise (KFME) released its report today (June 21) on the "Survey of the Impact of Minimum Wage Increases on Small Business Owners," which was conducted on 700 small business owners nationwide last month.

According to the survey, 87% of respondents stated that they feel a "significant burden regarding the current level of the minimum wage."

By sector, the highest percentages of those feeling the burden were in coffee shops (92.9%), hair and beauty salons (91.7%), and other wholesale and retail businesses (91.1%).

Among businesses with employees, 92.7% reported a decrease in operating profits due to the rise in the minimum wage, while 88.3% of businesses without employees reported the same.

As for countermeasures against rising labor costs, "reducing staff or halting new hiring" was the most common response at 38.4%, followed by considering the introduction of automation or unmanned systems (32.9%), reducing working hours (21.9%), raising prices (17.6%), and cutting investments (14.0%).

Regarding the appropriate minimum wage level to maintain employment, 54.7% of respondents selected "8,500 to 9,000 won," while 22.5% chose "9,000 to 9,500 won," and 18.8% chose "8,500 won."

When asked about the minimum wage for next year, 74.9% expressed the opinion that it should be lowered, while 23.6% believed it should be frozen.

Only 1.6% of respondents were in favor of an increase.

Song Chi-young, Chairman of the Korea Federation of Micro Enterprise, stated, "Small business owners are facing a double whammy, struggling with both shrinking consumption due to the economic downturn and the burden of labor costs exceeding 10,000 won." He added, "To ensure their survival and the recovery of employment, policy-based supplementary measures, such as applying different minimum wages by industry and establishing a job stabilization fund, are urgently needed."
※ Please note: This article was translated by AI and may contain errors.