Small biz owners reject proposed minimum wage hike

The minimum wage commission holds a meeting at the Sejong Government Complex, Thursday. Yonhap

By Lee Kyung-min

Small businesses said they squarely reject the hourly minimum wage of over 12,000 won ($9.28) proposed by labor groups, according to market watchers, Thursday.

This came shortly after members of the minimum wage commission representing labor groups said the hourly minimum wage for next year should be raised to 12,210 won. This is 26.9 percent higher than this year's 9,620 won.

The labor representatives held a press conference at the Sejong Government Complex before the commission's seventh plenary session.

They said the 12,210 won hourly minimum wage translates to a monthly income of about 2,551,890 won, provided that 209 hours are worked.

However, the Korea Federation of Micro Enterprise said the commission is turning a blind eye to the hardships of low-income businesses.

“Only about a week is left before the deadline for next year's minimum wage. But the minimum wage commission is ignoring the opinions of the small businesses,” they said in a statement.

The federation went further to say that no one can deny that different industries have different outcomes in sales, operating profit, labor intensity and productivity.

This is why they say imposing an across-the-board state-set hourly minimum wage simply goes against market principles.

“Workers' pay should be determined by market principles,” they said.

“But the current minimum wage system has been applied uniformly for 35 years with no regard for the small businesses that have to hire part-timers to make ends meet. We want to ask whether the commission considers the status quo justifiable when there are industries with clear low labor intensity and low labor productivity.”

They cited a related law governing minimum wage setting, under which different wages can be set by different industries.

“The labor groups are only after protecting self-interests to the point where livelihoods of low-income businesses are threatened,” the federation said. “We, the 7 million micro enterprises, hereby demand that the commission take an approach to reach a goal that is right, not self-important and destructive.”

The deadlocked current negotiation at the commission will likely push back the June 29 deadline about a month.

The deadline for making the minimum wage public for the following year is Aug. 5.