[Report] "Am I Getting Fired?" Convenience Store Part-Timers 'Anxious' Over Minimum Wage Increase... Owners Also 'Sigh'

Next Year's Minimum Wage Rises 5.1% to 9,160 Won
Federation of Korean Employers "Beyond Payment Capacity" vs. Korean Confederation of Trade Unions "Deception of Workers"
Convenience Store Owners Association "Minimum Wage Increase Ignores Self-Employed Reality" Backlash

On the 14th, the third day since the start of Level 4 social distancing, all indoor tables at a convenience store in Mapo-gu, Seoul are empty. The photo is unrelated to specific expressions in the article. Photo by So-Young Kim sozero815@asiae.co.kr

[Asia Economy Reporter Kim Soyoung] "With even regular employees getting laid off, what kind of ambition can part-timers have?"

After a tense tug-of-war between the business and labor sectors, next year's minimum wage was set at 9,160 won per hour. This is an increase of 440 won (5.1%) from this year's 8,720 won and will be applied starting in 2022. However, both labor and management expressed dissatisfaction with this decision.

The business community opposed it, saying it would negatively affect small business owners and jobs. The Korea Employers Federation stated in a press release, "The minimum wage proposed by the public interest commissioners for next year clearly exceeds the payment capacity of small and micro enterprises and small business owners," adding, "The responsibility for all problems arising from this lies with the labor sector and public interest commissioners who have repeatedly engaged in selfish struggles, ignoring economic realities."

The labor sector showed mixed reactions along with criticism that the current government failed to fulfill its '10,000 won minimum wage pledge.' The Federation of Korean Trade Unions (FKTU) accepted the next year's minimum wage despite considering it insufficient, while the Korean Confederation of Trade Unions (KCTU) labeled it as 'deception' toward workers and announced plans for intensified struggles.

Amid this situation where next year's minimum wage is welcomed by neither side, part-time workers met at convenience stores in the Mapo-gu area of Seoul on the 14th expressed fears of layoffs. The convenience store industry also showed discomfort, stating they lack the capacity to pay the increased minimum wage.

A part-timer, Ms. A (50, female), working at a convenience store said with a bitter smile, "I wonder why I even bother working part-time. Honestly, it would be fine if the minimum wage didn't increase at all." She questioned, "They are cutting working hours to 4 hours to avoid paying weekly holiday allowances, and now they want to raise the hourly wage?"

She added, "The store owners are struggling a lot," describing the reality as "In winter, they can't even say it's cold, and in summer, they can't say it's hot." She continued, "With even regular employees getting laid off, what kind of ambition can hourly part-timers have? They are already on the verge of being fired. Watching the news makes me feel like dying. I wonder if they have any sense rather than being thankful."

On the 14th, a street table at a convenience store in Mapo-gu, Seoul, is tidied up. Photo by So-Young Kim sozero815@asiae.co.kr

Mr. B (28, male), working short-term part-time at a nearby convenience store, said, "I usually know that the owner and their family take turns running the store." This seems to be because some store owners, feeling the burden of labor costs, are minimizing part-time hires and gradually increasing the time they operate the store themselves.

Regarding the recent minimum wage increase decision, he said, "Of course, as someone employed, it's a good thing, and I think it's right that the minimum wage rises following advanced countries," but also expressed concerns, "I have big worries."

Mr. B lamented, "They actually don't have much left either. Recently, due to COVID-19, they can't even do street vending. From the store owners' perspective, it's already tough because of COVID-19, and if labor costs rise too much, they will inevitably have to cut part-timers, causing a vicious cycle."

He continued, "Since labor costs are not supported by the convenience store headquarters but must be handled by the business owners themselves, it becomes a fight at the bottom line. If labor costs are divided like this, they will cut part-timers and rotate among their own family members, which is difficult in many ways," he complained.

Ms. C (54, female), working at another convenience store, said, "Of course, it would be better if they paid more, but since I'm older, I'm satisfied just working as I am now." She added, "It's obviously good that wages go up, but I'm not the only one working; there are 6 to 7 part-timers. The owner won't be happy." She also said, "Honestly, it's more profitable to close at night, but due to contract conditions with the headquarters, it's difficult to change that."

On the 14th, a street table at a convenience store in Mapo-gu, Seoul, is tidied up. Photo by So Young Kim sozero815@asiae.co.kr

Recently, self-employed people subject to level 4 social distancing due to the spread of COVID-19 in the metropolitan area expressed concerns about double hardships. Ms. D, a woman in her 50s who operates a convenience store on behalf of the owner, said, "Since I'm a salaried manager, I don't pay wages to part-timers, so the minimum wage increase doesn't directly affect me," but she worried about deficits.

She said, "Actually, convenience stores haven't been doing well lately. This week was worse because of level 4 social distancing," adding, "Since the convenience store is near a company and a hotel, with telecommuting and the hotel situation, revenue has dropped accordingly." She continued, "The owner doesn't take anything home even after paying my salary and part-time wages. But if the wage increases, it could lead to a loss."

As Ms. D's concerns show, with the recent increase in labor costs for self-employed people, more convenience stores with relatively low sales are choosing not to operate during late-night hours.

According to the industry on the 15th, the proportion of GS25 stores not operating during late-night hours has increased yearly: 13.6% in 2018, 14.7% in 2019, and 16.4% in 2020. As of the end of June this year, it rose to 18.1%.

Similarly, Seven Eleven's proportion of stores not operating during late-night hours increased from 17.6% in 2018 to 18.4% in 2019 and 21% in 2020. CU also saw 19% in 2018, 20% in 2019, and 20% in 2020 of stores closing or operating unmanned during late-night hours.

Emart24, which leaves late-night operations to discretion, had about 4,300 out of 5,509 stores operating unmanned or closed during night hours as of the end of last month.

The so-called 'hybrid stores,' which are a middle form between regular and unmanned stores and can operate unmanned at night, are also increasing. The number of unmanned stores among the four major convenience store chains in the first half of the year was 990, accounting for 2.19% of the total 45,277 stores (as of the end of last year).

Ms. D said about the industry changes that may occur after the minimum wage increase, "By next year, it will almost become (owner-operated)." She added, "If the store is located inside somewhere, unmanned stores are fine, but due to the nature of stores on the street, management is difficult, so even if they want to operate unmanned stores, it's hard."

Meanwhile, the Korea Convenience Store Owners Association issued a statement saying, "We cannot accept the decision to raise next year's minimum wage, which ignores the reality of self-employed people, including convenience store owners."

The association said, "After deducting labor costs, rent, and various taxes from the average monthly sales per store last year, the net profit for owners was just over 2 million won," adding, "There are many convenience stores that currently cannot afford to pay the minimum wage." They strongly opposed, saying, "Until now, owners have reduced labor costs by increasing working hours, but from next year, when the increased minimum wage applies, even that will not be possible."

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