Small Business Owners Submit Minimum Wage Objection to Ministry of Employment and Labor... "Reached Payment Capacity Limit"

Myeongdong Small-Scale Store Vacancy Rate at 43.3%
(Seoul=Yonhap News) Reporter Lee Jeong-hoon = On the afternoon of the 29th, Myeongdong Street in Seoul appeared relatively quiet despite it being lunchtime.
Due to the impact of strict social distancing measures and a decrease in foreign tourists, nearly half of the small-scale stores in Myeongdong have closed. July 29, 2021
uwg806@yna.co.kr
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[Asia Economy Reporter Junhyung Lee] The Korea Federation of Micro Enterprise (KFME) announced on the 29th that it has submitted an objection letter to the Ministry of Employment and Labor regarding next year’s minimum wage proposal.

KFME raised objections citing reasons such as ignoring the payment capacity of micro enterprises, who are the direct parties responsible for paying the minimum wage; failing to reflect the difficult reality of micro enterprises due to COVID-19; and not applying the minimum wage differently according to the size and industry of micro enterprises.

Through the objection letter, KFME stated, "Our economy is showing a K-shaped polarization phenomenon, recovering only centered on large corporations and exports," and added, "Micro enterprises, the direct parties responsible for paying the minimum wage, are caught in a 'debt vicious cycle,' repaying debt with more debt due to the COVID-19 crisis." They further noted, "The heartfelt cries of micro enterprises that it is difficult to accept excessive minimum wage increases were not reflected at all in this minimum wage review process."

Logo of the Korea Federation of Micro Enterprise. [Photo by Korea Federation of Micro Enterprise]

KFME pointed out that when including weekly holiday allowances, the four major social insurances, and retirement allowance reserves, the monthly labor cost for next year will require at least 2.38 million KRW. KFME stated, "In a situation where the payment capacity of micro enterprises has reached its limit, this increase will negatively affect jobs for vulnerable workers and temporary employees," and added, "Under the current special circumstances, the payment capacity and management conditions of micro enterprises should be considered, but these aspects were excluded from this minimum wage decision process."

Namsoo Cha, Head of Policy and Public Relations at KFME, said, "With the spread of the Delta variant causing the fourth wave, it is uncertain when the domestic economy will return to normal," and added, "This minimum wage increase has imposed an even greater burden on micro enterprises."

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