Two out of three small business owners believe the minimum wage should be lowered next year, according to a new survey. More than half plan to reduce new hires if the minimum wage is raised.
According to the Korea Federation of Small Businesses on Aug. 8, the “Survey on Small Businesses’ Ability to Pay Minimum Wage and Minimum Wage Policy,” which was conducted among 1,000 small businesses from Aug. 8-27, found that 64.5 percent of respondents said the minimum wage should be lowered.
This was followed by 33.3% who said it should be frozen, and only 2.2% who said it should be raised. A whopping 97.8% are opposed to raising the minimum wage.
When asked about their plans in the event of a minimum wage increase in the next year, 58.7% said they would reduce new hires. 44.5% plan to reduce their existing workforce스포츠토토, and 42.3% plan to reduce the hours of their existing workforce.
33.4% of small businesses said they have already reduced hiring due to the burden of the minimum wage increase.
Additionally, 83.0% of small business owners believe there should be different minimum wages for different industries.
When asked, “How do you think the minimum wage should be differentiated by industry,” 57.1% of respondents said, “It should be applied to industries with a high proportion of small businesses,” meaning that industries with a high proportion of small businesses should be prioritized for a differential minimum wage.
Another 31.6 percent said that the minimum wage should be prioritized for industries such as agriculture, fisheries, and hospitality, which have a high rate of underpayment.
In addition, the majority of small business owners, 99.7%, said that paying the current minimum wage (9,620 won) is a great or very great burden, and 53.7% perceived that the minimum wage is high compared to labor productivity.
The average monthly labor cost for workers employed by small businesses from January to April this year was 2.91 million won, up 10.4 percent from the same period in 2021. On the other hand, the average monthly operating profit from January to April this year was 281.7 million won, which was about 100,000 won less than the average monthly labor cost.
While the average annual increase in operating profit is only 1.6 percent, the increase in labor costs is 3.7 percent, indicating that small businesses are going it alone, Sosang analyzed.
Furthermore, small businesses cited the minimum wage and rising energy costs as reasons for the decline in operating profit this year.