More Small Businesses Have Trouble Paying Staff

  • By Gwak Rae-geon

    October 16, 2020 12:08

    More and more small businesses that employ fewer than five staff were unable to pay them even before the coronavirus epidemic due to a steep rise in the minimum wage.

    According to data from the Ministry of Employment and Labor, the number of workers employed by small businesses who went unpaid surged 16.8 percent from 2017, when President Moon Jae-in took office, until last year, or from 128,936 to 150,674.

    The amount of back wages they were owed soared 45 percent from W363 billion to W526 billion over the period (US$1=W1,149). The trend was especially marked in firms with fewer than five staff.

    The main reasons were the economic downturn and a sharp surge in the minimum wage. The hourly minimum wage jumped 32.7 percent from W6,470 in 2017 to W8,590 last year.

    Small businesses owed workers W337.1 billion in wages in the first eight months of this year, accounting for a staggering 32.8 percent of total back pay and up from 29.1 percent in 2018 and 32.3 percent in 2019.

    Main opposition People Power Party lawmaker Hong Suk-joon said, "Small businesses are bearing the brunt of the government's failed economic policies, and the coronavirus epidemic only made things worse."

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