DistantNews
Support us
Small Businesses Struggle, Urge Minimum Wage Freeze Amid Rising Costs
🇰🇷 South Korea /Economy & Trade

Small Businesses Struggle, Urge Minimum Wage Freeze Amid Rising Costs

From Dong-A Ilbo · () Korean

Translated from Korean, summarized and contextualized by DistantNews.

At a glance

News Sources not specified Ongoing story
  • Small business owners are struggling with rising costs and are concerned that a 2% minimum wage increase for 2025 will further strain their finances.
  • Negotiations between labor and management have narrowed the gap to 690 won per hour, but small business representatives walked out of the latest meeting, deeming further increases unaffordable.
  • The industry group is advocating for freezing the minimum wage, citing economic downturns, increased rent, and raw material costs, and has expressed concern that a wage hike could fuel inflation and reduce employment.

South Korean small business owners are expressing deep concern over a potential 2% increase in the minimum wage for 2025, arguing that even this modest rise is difficult to absorb amid worsening economic conditions and rising operational costs.

The increase rate seems to be over 2%, so we expressed that we cannot afford any further increase, representing the small business owners.

— Small Business Owners Association representativeExplaining their reason for walking out of negotiations.

The latest negotiations saw the gap between labor and management proposals narrow to 690 won per hour. However, representatives from the small business sector walked out of the 13th Minimum Wage Committee meeting, stating that any increase beyond the current level is unsustainable. They are pushing for the minimum wage to be frozen, highlighting the burden of increased labor costs on top of already high expenses for rent and raw materials.

If an unmanageable level of increase that ignores the survival rights of small business owners is reached, it will be a signal that shakes the foundation of the Korean economy.

— Small Business Owners AssociationA statement urging for a reasonable agreement.

An industry survey indicated that 70.3% of small business owners anticipate reducing new hires if the minimum wage increases by 2027. The sector also laments the failure to implement differentiated minimum wages by industry this year, a long-standing request. They warn that an unmanageable wage hike could destabilize the national economy and urge for a "freeze-level" reasonable agreement.

In a situation where real wages are continuously falling and labor market polarization is worsening, a bold decision to increase wages is absolutely necessary.

— Ryu Ki-seop, Secretary-General of the Korean Confederation of Trade UnionsArguing for a significant minimum wage hike.

Labor unions, however, are strongly advocating for a wage increase, emphasizing the need to support low-income workers and stimulate domestic demand. They argue that a significant raise is necessary given the continuous decline in real wages and widening labor market disparities. The committee is expected to make a final decision on the 2025 minimum wage on July 14.

We will not compromise on this issue, which directly links the stabilization of low-income workers' livelihoods to domestic demand revitalization.

— Ryu Ki-seop, Secretary-General of the Korean Confederation of Trade UnionsEmphasizing the importance of wage increases for the economy.
DistantNews Editorial

Originally published by Dong-A Ilbo in Korean. Translated, summarized, and contextualized by our editorial team with added local perspective. Read our editorial standards.

More Stories

From Our Blog