Seoul: Nearly two-thirds of self-employed small business owners report worsening business conditions this year and are advocating for a freeze or reduction in the minimum wage, a recent poll revealed.
According to Yonhap News Agency, a survey conducted by the Federation of Korean Industries (FKI) found that 63.4 percent of 500 respondents experienced a deterioration in business conditions compared to the previous year. Conversely, only 6.8 percent reported improvements, while 29.8 percent noted no significant change.
Regarding the burden of the current minimum wage, set at 10,030 won (US$7.37) per hour, 50 percent of respondents described it as heavy. Meanwhile, 30.6 percent considered it moderate, and 19.4 percent did not view it as a burden. Businesses in the lodging and food services sector felt the greatest strain, with 64.2 percent expressing concern, followed by wholesale and retail at 51.9 percent, education services at 50 percent, and manufacturing at 48.4 percent.
When questioned about the future of the minimum wage, 59.2 percent of respondents favored either freezing or reducing it. Support for maintaining the current level stood at 44.2 percent, while 15 percent advocated for a reduction. Additionally, 30.4 percent of business owners reported earning less than the statutory minimum wage, which equates to approximately 2.1 million won per month based on a standard 40-hour workweek.
The Minimum Wage Commission, a trilateral panel comprising labor, management, and public representatives, has been negotiating the national minimum wage for 2026 since April. However, the commission missed the legal deadline for deliberations on Thursday due to unresolved differences between labor and business representatives, with talks set to resume on July 1.
Labor representatives initially demanded a 14.7 percent increase, proposing an hourly wage of 11,500 won, later revising it slightly to 11,460 won. In contrast, the business side initially pushed for a wage freeze but later suggested a 0.4 percent increase to 10,070 won per hour.
The commission must submit a final proposal to the labor minister by mid-July, following due administrative procedures. The labor ministry is required to finalize and announce the minimum wage for the coming year by August 5.
An official from FKI emphasized the importance of a cautious approach in setting next year's minimum wage, highlighting the need to consider employers' financial capacities and the overall labor market conditions.