Small business owners are increasingly burdened by rising labor costs. (Image courtesy of Yonhap)
SEOUL, June 26 (Korea Bizwire) — Nearly two-thirds of South Korea’s self-employed small business owners say their economic conditions have worsened this year, fueling renewed calls for a freeze or even a cut to the minimum wage, according to a new survey that underscores deepening financial pressures on the country’s smallest enterprises.
The survey, released Thursday by the Federation of Korean Industries (FKI), paints a sobering portrait of the challenges faced by small entrepreneurs.
Out of 500 respondents, 63.4 percent reported that their business conditions had deteriorated compared to last year. Just 6.8 percent said they had seen improvements, while 29.8 percent indicated their circumstances remained largely unchanged.
Beneath these numbers lies growing discontent over labor costs, especially the national minimum wage, currently set at 10,030 won (approximately $7.37) per hour. Exactly half of the respondents described the burden of the current minimum wage as “heavy,” with another 30.6 percent saying it was “moderate.” Only 19.4 percent reported feeling no burden at all.
By sector, the strain was felt most acutely in lodging and food services, where 64.2 percent of businesses cited the minimum wage as a significant pressure point. Wholesale and retail operations followed at 51.9 percent, with education services (50 percent) and manufacturing (48.4 percent) not far behind.
Reflecting this sentiment, a majority—59.2 percent—of business owners said the minimum wage should be either frozen or reduced. While 44.2 percent called for a freeze, 15 percent supported a decrease.
Meanwhile, 30.4 percent of respondents admitted that their monthly earnings fell below the statutory minimum, which equates to about 2.1 million won per month for a full-time, 40-hour workweek.
This file photo, taken April 18, 2025, shows a shopping complex with small restaurants in central Seoul. (Yonhap)
An official from the FKI stressed that setting next year’s minimum wage should be approached with caution, noting that employers’ ability to pay must be considered alongside the broader health of the labor market.
As policymakers prepare for the upcoming wage deliberations, the growing concerns from small business owners add pressure to balance workers’ rights with the survival of the country’s struggling self-employed sector—often described as the backbone of South Korea’s service economy.
Ashley Song (ashley@koreabizwire.com)
