Family members, kiosks fill the void as small business owners cut staff to survive

"On weekdays, my daughter works the daytime shift, and my husband has taken over the night shift from the part-timer we used to hire."

Kim, a 52-year-old woman who has run a convenience store in Gangseo-gu, Seoul, for more than two decades, says she is going through the hardest stretch of her life as a small business owner. She once employed as many as six part-time workers, but cut that number to three last year and has since reduced it further to two, filling the remaining shifts with family. The trigger: the minimum wage surpassing 10,000 won ($7) per hour last year, making labor costs too heavy to bear.

With labor and management still 690 won apart in negotiations over next year's minimum wage, survival-mode management has become the norm for small business owners across the country. A survey of 700 small business owners nationwide by the Korea Federation of Micro Enterprise found that 70.3 percent said they would scale back new hiring if the minimum wage rises again next year, while 52.7 percent — more than half — said they would reduce existing staff. Squeezed by sluggish domestic consumption, rising raw material costs and rent, and climbing labor expenses, owners are increasingly turning to family labor, shorter operating hours and self-service kiosks to stay afloat. With labor groups proposing a minimum wage of 11,220 won for next year, cries of distress are growing louder on the ground.

"My daughter and I take turns on weekday daytime shifts, and my husband handles the nights," Kim said. "But everyone needs at least one day off to keep going physically, so we hired just the bare minimum of part-timers to cover those gaps." The store is run mostly by Kim, her daughter and her husband. Kim and her daughter share the morning and afternoon shifts on weekdays, while her husband works nights. The family used to take both Saturday and Sunday off, but now they rest only one day a weekend. To preserve that minimal break, the two remaining part-timers work just 12 and 14 hours a week respectively. Even after cutting staff this far, labor costs still exceed 1 million won a month.

With three family members working the floor, the store's net monthly profit — after labor costs, rent and franchise fees — barely clears 3 million won. A franchise agreement means Kim cannot simply walk away without facing penalty fees. "My monthly rent is 2.36 million won, and some months I can barely make it, so I've been living off small-business loans," she said with a sigh. "I've even looked into getting a part-time job somewhere else, because going out to work might actually pay better."

Yoo, a 65-year-old owner of a kimchi stew restaurant in Gwanak-gu, Seoul, who has run the business for more than a decade, faces a similar situation. He has already cut his staff from four to two and brought his wife in to help, yet labor costs — including weekend part-timers — still run close to 7 million won a month. "Ingredient costs like vegetables keep rising every month, and the full-time staff I employ earn more than 3 million won each per month," he said.

If the minimum wage rises, Yoo plans to work longer hours himself and replace serving staff with part-timers on shorter shifts. "After paying insurance premiums, value-added tax and other taxes, it's hard to save anything even with my wife and me both working," he said. "But raising prices isn't easy either — restaurant customers are sensitive to even a 1,000-won increase, and I'm afraid of losing regulars," he added.

Across industries, survival-mode management aimed at cutting labor costs is spreading. Owners are going beyond simply drafting in family members — shortening operating hours and installing self-service ordering and payment systems have become everyday strategies for trimming fixed costs. Shutting early when late-night foot traffic dries up and investing in machines rather than people have taken hold as core survival tactics.

Lee, 35, who runs a grilled offal restaurant in Gangseo-gu, Seoul, has been closing up around 9 or 10 p.m. most nights. A few years ago, he stayed open until midnight or 1 a.m., but with customers thinning out and electricity, labor and other overhead costs piling up, closing early now makes more financial sense. "Online food delivery apps mean almost nobody comes out late at night anymore, and the Homeplus headquarters nearby used to bring in a steady stream of office workers — but that foot traffic has dried up too, making things even harder," he said. "When I think about running costs, it's better to just close early."

Park, 62, who runs a bakery in Jung-gu, Seoul, leased a self-checkout kiosk last month on a five-year contract for 5 million won. The bakery currently employs four part-time workers handling packaging and the register, each earning about 2.5 million won a month. Spread over five years, the 5 million won kiosk rental amounts to less than two months' wages for a single part-timer. "Even at 5 million won over five years, I'll recoup the cost in two or three months," Park said. "When the minimum wage goes up, I'll have to raise everyone else's pay a little too, so once the kiosk is running smoothly, I plan to cut one position."

Small business owners agree that any minimum wage increase must take current operating conditions into account. With consumer spending in a prolonged slump and rent, utility bills and raw material costs all bearing down at once, they say relentless labor cost increases leave them no choice but to cut jobs or invest in automation. Calls are growing within the industry for support measures to ease the labor cost burden on small business owners alongside any minimum wage discussions.