3 out of 4 Small Businesses Can't Afford Minimum Wage Hike

  • By Lim Kyeong-eop

    July 23, 2018 12:45

    Three out of four small business owners said they will be unable to afford the increased minimum wage next year and may have to lay off staff.

    In a survey by the Korea Federation of Small and Medium Business of 300 small business owners, 74.7 percent said it will be difficult to pay the minimum wage of W8,350 an hour next year, which is an increase of 10.9 percent (US$1=W1,135).

    About 25 percent said they can tolerate the hike or do not care.

    Some 75.3 percent said the situation is a crisis, 44.2 percent of them adding that their monthly sales have dropped more than 20 percent.

    Asked about the reasons, 61.1 percent pointed to lackluster private spending and 57.5 percent cited the minimum-wage hike and resulting personnel costs.

    Kim Kyung-man at the Ministry of SMEs and Start-ups said, "Small business owners believe the present situation is a major crisis. The government must come up with measures to ease the shock of the rapid minimum-wage hike, perhaps by applying it only in selective industries."

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