Seoul rolls out support plan for small businesses
A sign looking for renters hangs outside an empty storefront in Seoul, Aug 22. / Yonhap
By Lee Suh-yoon
The Seoul Metropolitan Government rolled out measures, Wednesday, to bring more customers to small businesses and improve their financial and working conditions.
The move came after the central government announced last week it would spend 7 trillion won ($6.3 billion) to help self-employed small business owners cope with the rising minimum wage.
The biggest measure, among others, is to limit the number of convenience stores by spacing them out by at least 100 meters instead of the current 50 meters. Convenience stores owners in Korea often make less than the minimum wage due to tough competition, market saturation and high commissions costs of big franchise brands such as CU and GS25.
The city will enforce this new regulation in a roundabout way, applying the new spacing rule to “cigarette-selling retail stores.”
“Cigarettes account for a big share of the total revenue of convenience stores, so we plan to regulate excessive competition between stores by limiting the increase in the number of cigarette retail stores,” Cho In-dong, deputy mayor for Economic Development at the Seoul Metropolitan Government, said at a press briefing.
On the same day, small business owners in Seoul held a mass rally, calling for better state policies to sustain their livelihoods.
The number of self-employed business owners in Korea currently stands at 5.5 million, accounting for over 20 percent of the total employed workforce.
However, many are struggling to stay afloat due to excessive competition and the sluggish economy. Last year, the number of businesses that went bankrupt topped 900,000, almost 1.5 times the number of businesses that went out of business in the wake of the 1998 financial crisis.
The city's support package also includes the provision of paid sick leave.
“Self-employed business owners and day laborers who are hospitalized and earn less than the median wage can receive a living wage — currently calculated at 73,000 won a day — for up to 15 days,” Cho said.
According to the Bank of Korea, the total size of loans taken out of financial institutions other than banks topped 131 trillion won in June, raising fears of a mass bankruptcy.
Mindful of it, the support package also included financial aid such as low-interest loans and the financing of unemployment insurance fees.
In the support package, the city also fit in various smaller measures that seem unlikely to yield tangible results. One of these included forcing city government employees to buy their own lunch at small restaurants around their office once every month by closing down the building cafeteria.
In its statement, the city also added it will loosen parking restrictions around traditional wet markets and commercial areas packed with small businesses to make them more accessible to potential visitors.