SEOUL, Aug. 2 (Korea Bizwire) — More than 90 percent of small merchants plan to lay off workers because of the expected minimum wage increase next year that is disapproved by nearly all of them, a survey showed Wednesday.
In the survey carried out by the Korea Federation of Micro Enterprise from July 21-28, 92.4 percent of 532 merchants polled said they would need to cut back on the number of their employees, with 68.1 percent saying they definitely would have to resort to layoffs.
The government and union representatives agreed on a 16.4 percent raise of the minimum pay to 7,530 won (US$6.73) for 2018, with an ultimate goal of reaching 10,000 won. Employees big and small are protesting the agreement for forcing them to bear heavier costs when their businesses are struggling. The government wants to put more money into workers’ pockets to improve their livelihoods and to boost consumption.
Ninety-one percent of the merchants polled expected they would have to work over 12 hours a day as a result of the wage increase and the need to use fewer people. Some 34.6 percent said they expect workhours of the employees to be shortened from 6-8 hours to 4-6 hours.
Asked about the minimum wage deal for next year, 77.5 percent said they were deeply dissatisfied with the outcome, while 18.3 percent said they were discontented.
A third of the merchants said they had two to three part-time workers as of the end of June this year. Fifty-nine percent of the merchants said their monthly average sales ranged between 10 million won and 30 million won, while 29.2 percent said it fell under 10 million won.
The survey found that this year’s sales had dropped from last year for 87 percent of the merchants. Only 1.9 percent reported a sales increase, and 21.9 percent said they were suffering from business losses.
In citing reasons for the slump, 36.3 percent blamed the overall economic downturn that reduced customers and 23.7 percent said an increase of personnel costs was the main cause for hard times.