Minimum Wage Crisis in Korea - written by 10317 Yoo Hee-ju
Minimum Wage Crisis in Korea
written by 10317 Yoo Hee-ju
Ahead of deciding next year's minimum wage, convenience store owners argue that personnel expenses are already a burdensome for them. They warned that they are going to close their stores simultaneously when the government raises the minimum wage.
This year's minimum wage is 7,530 won per hour which was 16.2% more than the wages in 2017. However, the minimum wage council plans to increase minimum wage to 8,350 won per hour starting in 2019 causing an uproar in Korean small business society earlier this year.
Sung In-Jae, a representative of national convenience store association, held a press conference and expressed his mind related to minimum wage problems on Thursday(12th July, 2018). He argued that every convenience store and their owners could not make a profit to support their workers' wages to fit this 2019 increased. He went on to explain that while convenience store owners earned about 20% of the whole profit, after the wage increase whey would make a profit of about 14%.
According to statistics shown by Sung In-Jae, convenience store owners made profit of about 2 million won on monthly average in 2017. However, convenience store owners made 1.3 million won on monthly average this year due to the increased minimum wage. This is a comparatively low amount as convenience store part-time worker earns 1.5 million won every month. Whereas, convenience store part-time worker worked 209 hours on average, convenience store owners worked 306 hours on average. Therefore, the owners are making less money than their employees despite the hours worked.
After revealing convenience store owners' difficulty, he pointed out that there are no convenience store owners who have voting rights in the minimum wage council even though the convenience store is the most affected area when minimum wage increases.
Despite these concerns, the minimum wage council decided to increase the minimum wage to 8,350 won in 2019, on the day of 14th July, 2018.
After this announcement, merchants who sell things in small amounts claimed that it is more of burden to them because of the increased minimum wage in 2017 which they were trying to deal with. They also complained that the government should apply differential minimum wage rates according to owners' circumstances. They feel that their opinions were ignored.
One shop owner in Sinchon argued that one part-timer worker's monthly pay increased from 2.3 million won to 2.7 million won. He added that if he consider about four insurances that they need to enroll for in order to hire their workers, owners would pay more money.
As there were many complaints toward increasing the minimum wage in 2019, President Moon Jae-in proclaimed not to carry out his pledge which said that he is going to increase the minimum wage to 10,000 won per hour by 2020. This implicates that the minimum wage increase will not happen in a short period of time.
The part-time workers who earn a profit when minimum wage increased started to protest. They claim that they do not even receive the minimum wage so minimum wage is actually maximum wage for them.
As these protests related to minimum wage increasement is happening continuously, many members of the National Assembly urge the government to come up with a solution to this financial issue.
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