"6 out of 10 Small and Medium Enterprises Say Minimum Wage Should Be Frozen"

"Among 600 SMEs, 59.5% say minimum wage should be frozen or lowered"
"46% consider reducing employment if minimum wage rises"
KEF and Korea Federation of SMEs 'Survey on Employment Difficulties and Minimum Wage Opinions in SMEs'

Data provided by the Korea Employers Federation

[Asia Economy Reporter Yoo Hyun-seok] It has been revealed that 6 out of 10 small and medium-sized enterprises (SMEs) believe that the minimum wage should be frozen or lowered. Analysis suggests that the business conditions of SMEs have deteriorated compared to the pre-COVID-19 period, reaching the limit of their payment capacity.

On the 24th, the Korea Employers Federation and the Korea Federation of SMEs announced the results of a survey titled 'SME Employment Difficulties and Minimum Wage Opinions,' conducted on 600 SMEs employing workers at the minimum wage level. According to the survey, 59.5% responded that next year's minimum wage should be frozen (53.2%) or lowered (6.3%).

This response appears to be due to the fact that 47.0% of SMEs still feel that their current business conditions have worsened compared to the pre-pandemic period, and the outlook for future management and employment conditions is more negative (36.9%) than positive (12.3%).

In particular, SMEs are also considering reducing employment if the minimum wage is increased. When asked about their response to a minimum wage increase, 47.0% said they had no measures (or did not know). Notably, employment reductions such as layoffs of existing staff (9.8%) and reductions in new hiring (36.8%) accounted for 46.6% of the total.

Data provided by the Korea Employers Federation

The Korea Employers Federation stated, "Currently, 29.0% of SMEs find it difficult to pay wages normally, and 33.2% responded that they are unable to cope with rising labor costs, which was the highest response rate," explaining that this seems to be due to SMEs' vulnerability in responding to minimum wage increases.

Additionally, 53.7% of SMEs expressed the opinion that differentiated application of the minimum wage is necessary. The rational criteria for differentiation were industry (66.5%), job type (47.2%), company size (28.9%), age (11.8%), and region (7.5%), in that order.

Ryu Ki-jung, Executive Director of the Korea Employers Federation, emphasized, "The fact that about 60% of the surveyed SMEs are demanding at least a freeze on next year's minimum wage shows that our SMEs have reached the limit of their payment capacity. In this year's minimum wage discussions, the payment capacity of SMEs should be the most critical decision criterion."

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