Small business group files objection to next year's minimum wage, warns of accelerated job cuts

The Korea Federation of Micro Enterprise said Monday it had submitted a formal objection to the Ministry of Employment and Labor over next year's proposed minimum wage of 10,700 won ($7) per hour — a 3.7 percent increase from this year — and urged the ministry to conduct a re-deliberation.

The federation held a press conference that day in front of the ministry's building in Sejong, calling the increase "a decision that will accelerate job cuts driven by small businesses — a double blow on top of an already painful situation marked by falling revenues and sluggish economic conditions."

The federation said the minimum wage hike translates to an increase of about 79,000 won per month and about 950,000 won per year in base salary costs. "For a business employing four workers, the additional annual burden, including social insurance contributions, comes to more than 10 million won," it said.

The group said the proposed minimum wage ignores ground-level realities, pointing to three concerns: small business owners' inability to afford the increase, the uniform application of a single rate that disregards differences in payment capacity across industries, and a decline in employment quality driven by a surge in ultra-short-hour work arrangements.

Song Chi-young, chairman of the federation, said four out of 10 small business owners earn an average monthly operating profit of less than 2 million won — falling short of even the 2.23 million won monthly minimum wage equivalent. "A re-deliberation is absolutely necessary to protect the survival of small business owners on the brink and to prevent an employment crisis stemming from the small business sector," he said.

The federation also called for ▷greater representation of small business owners on the Minimum Wage Commission, ▷a shift to biennial minimum wage decisions and differentiated application by industry, ▷and the revival of the job stability fund and other effective business stabilization support measures.