'My part-timer earns more than I do': Small-business owners squeezed by minimum wage

"In the end, running a restaurant is all about labor costs. When you break it down by hours worked, we're actually earning less than the minimum wage ourselves."

Byeon, 61, who runs a restaurant near Hongik University in Mapo-gu, Seoul, with his daughter, made the remark as South Korea's minimum wage holds at 10,000 won ($7) per hour. The landscape of small businesses is shifting as a result: owners unable to absorb rising labor costs are stepping onto the floor themselves instead of hiring staff, and increasingly pulling family members in alongside them. Even after working long hours, many find their effective hourly earnings fall below the minimum wage — a phenomenon analysts are calling the "owner sub-minimum-wage gap." A survey by the Korea Enterprises Federation of 500 self-employed business owners nationwide found that 34.0 percent of respondents reported monthly income below the minimum wage benchmark, based on a 40-hour workweek.

Byeon's restaurant brings in 14 million won a month in sales, but fixed costs eat through most of it: 5 million won in ingredients, 2 million won in rent and 1 million won in utilities. He also employs a single part-time worker for two hours a day, five days a week, at 13,000 won an hour. After paying that 520,000-won labor bill, Byeon and his daughter are left with roughly 5.48 million won between them each month.

Working from 9 a.m. to 9 p.m. six days a week, their effective hourly wage works out to about 9,133 won per person. "To hire a kitchen helper, you'd have to pay at least 3 million won a month," Byeon said. "The mental and physical toll is heavy, but the two of us have no choice but to keep doing it ourselves."

Kim, 66, who recently opened a cafe in Gyeyang-gu, Incheon, faces a similar situation. His monthly sales fall below 10 million won, while fixed costs — 2 million won in ingredients, 750,000 won in rent and 100,000 won in utilities — drain revenue steadily. Kim also employs one experienced full-time staff member and one part-timer, with combined labor costs running to about 5 million won a month. That leaves him with roughly 2.15 million won — barely enough to cover his own labor, let alone turn a profit, given that he works close to eight hours a day, six days a week.

"I'm running at a loss for now because it's still early days," Kim said. "But if the minimum wage goes up next year, I'll end up letting the part-timer go and covering those hours myself."

Survey data backs up what Byeon and Kim are experiencing: a significant share of self-employed business owners in South Korea are earning less than the minimum wage.

The Korea Enterprises Federation commissioned polling firm Mono Research to survey 500 self-employed business owners nationwide for its "2026 Self-Employed Business Environment Perception Survey." It found that 34.0 percent of respondents reported monthly income below the minimum wage of 2.16 million won, calculated on a 40-hour workweek.

Fear of closure is also mounting. Some 25.2 percent of respondents said they were already at the point of considering shutting down. If the minimum wage rises by 1 to 3 percent, an additional 14.6 percent said they would consider closing; a 3 to 6 percent increase would push another 12.0 percent to that point.

Against that backdrop, self-employed owners are calling for reforms to how the minimum wage is set. In the survey, 86.0 percent said their views are not adequately reflected in the decision-making process. The most urgently needed reforms, respondents said, were capping increases based on economic conditions (24.3 percent), applying differentiated rates by industry and region (21.9 percent), and strengthening criteria such as employers' ability to pay (15.9 percent).

On the ground, the growing call is not simply to slow wage increases but to reform the system to reflect the realities of each industry — particularly given the current slump in domestic consumption and rising input costs. Owners warn that without concrete relief measures such as reduced labor-cost burdens, tax support and employment assistance, job cuts, price hikes and business closures will only accelerate.

There are also voices arguing that the minimum wage debate has moved beyond a simple question of pay raises and is now directly tied to the survival of small businesses. "The reality for South Korea's small-business owners is that they work themselves breathless and still cannot earn the minimum wage," said Song Chi-young, chairman of the Korea Federation of Micro Enterprise. "If a minimum wage increase is pushed through at a level that small businesses simply cannot bear — one that ignores their right to survive — it will be the opening shot that shakes the South Korean economy to its roots."