SME Industry Appeals for Next Year's Minimum Wage 'Freeze'... "Already at 10,992 Won Level"

‘Appeal to the Public Urging Minimum Wage Freeze’ Press Conference
Korea Federation of SMEs: "We Must Save Small Businesses and Protect Jobs"
Monthly Labor Cost per Person 2.38 Million KRW... Complaints about Labor Cost Burden

On the 27th, representatives of small and medium enterprise cooperatives held a press conference appealing to the public to freeze the 2023 minimum wage at the Korea Federation of SMEs in Yeouido, Seoul. Photo by Kang Jin-hyung aymsdream@

The small and medium-sized enterprise (SME) sector has appealed to freeze next year's minimum wage at 9,160 won, the same as this year, to ensure business survival and job creation. They stated that including the weekly holiday allowance, the minimum wage is already at about 10,092 won, making any further increase unbearable.

On the morning of the 27th, the Korea Federation of SMEs held a press conference titled "National Appeal to Freeze the Minimum Wage for 2023" at the Federation's office in Yeouido, Seoul, advocating for the freezing of the minimum wage. This press conference was organized to convey the voices from the field of SMEs and small business owners and to urge the Minimum Wage Commission to make a reasonable decision. Representatives from 19 industry-specific cooperatives and associations participating on the day appealed that next year's minimum wage should be frozen considering the payment capacity of vulnerable small and micro enterprises and small business owners.

Joo Bo-won, Chair of the Labor and Workforce Committee at the Federation of SMEs, stated, "According to a recent survey by the Federation, half of the SMEs have no countermeasures if the minimum wage increases, and the other half plan to respond by reducing employment." He added, "The minimum wage should be decided at a freeze level so that SMEs can survive and workers' jobs can be protected."

According to the Federation of SMEs, Korea's minimum wage is 61.2% of the median wage, which is higher than the OECD average of 55.2%. Including the weekly holiday allowance, this year's minimum wage is about 10,092 won. When factoring in severance pay and the four major social insurance premiums that companies must bear, the labor cost per person is estimated at 2.38 million won per month. Due to low labor productivity and insufficient corporate capacity to pay labor costs, 3.22 million workers earned less than the minimum wage last year.

Yoon Young-bal, Chairman of the Korea Vending Machine Operators Cooperative, said, "Although the minimum wage is increasing, sales are not rising, so we are coping by reducing working hours," adding, "The burden of labor costs has increased as public holidays have been converted into paid holidays." Kim Chang-woong, Chairman of the Korea Construction Equipment Maintenance Association, stated, "Most already pay above the minimum wage, but if the minimum wage rises, wages for existing workers must also be increased accordingly, increasing labor cost burdens."

Park Gil-soo, CEO of Samwoo, lamented that the minimum wage increase is making it difficult to nurture skilled workers. If the minimum wage rises excessively, it becomes difficult to provide additional wage increases based on skill levels, making it harder to secure skilled workers.

The Labor and Workforce Committee stated in a press release, "We earnestly appeal to freeze the minimum wage so that SMEs and small business owners, who are enduring with pride in developing the national economy despite difficult circumstances, can escape survival threats and continue to create jobs."

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