Convenience Store Owners Association Demands Minimum Wage Reduction... "Differentiated Application by Industry Needed"

In July 2018, a convenience store owner in Dangjin-si, Chungnam, posted a notice on the door stating "No part-time job inquiries" due to the burden of minimum wage increases. Photo by Yonhap News

[Asia Economy Reporter Moon Hyewon] As the labor and management sectors sit at the negotiation table for next year's minimum wage, fierce struggles continue amid growing economic uncertainties, with voices from small business owners advocating for wage cuts growing louder.

On the 2nd, the Korea Convenience Store Owners Association held a press conference at the Korea Federation of Small and Medium Business in Yeouido, Seoul, demanding a reduction in next year's minimum wage and differentiated application by industry.

In a statement, the association said, "Small business owners, including convenience store owners, face prolonged economic downturns due to the COVID-19 pandemic, and if the minimum wage increases, they have no choice but to reduce the jobs they have been maintaining or close their businesses. In addition to structural market problems, the rapid increase in the minimum wage has caused the rate of small business owners paying below minimum wage to reach 30-40%. We have now entered a state of non-compliance where even if they try to follow the law, they cannot."

The association further urged reflecting the economic crisis caused by the prolonged COVID-19 pandemic and proposed coexistence measures for small business owners and workers, including ▲a 2.87% reduction in the minimum wage (reversing last year's increase) ▲abolition of weekly holiday pay ▲differentiation of minimum wage by industry and business size.

According to the association, as of the end of 2018, the average annual sales of franchise stores from five convenience store brands were 578.44 million KRW. Assuming the store owner works 50 hours per week, the monthly income is estimated to be around 1 million KRW, which is below the minimum wage, the association stated.

Choi Jong-yeol, chairman of the CU Franchise Store Owners Association, said, “Currently, 20% of convenience stores operate at a loss, unable to cover even labor and rent costs,” adding, “Store owners have worked 70 to 80 hours a week or even mobilized family members to pay the minimum wage despite not earning enough themselves, but now they have reached the limit and cannot increase working hours any further. They lack the ability to pay the minimum wage.”

This content was produced with the assistance of AI translation services.