Small shop owners, workers worried about minimum wage hike

2018-07-18 1

There's been a strong backlash to the proposed minimum wage hike of almost eleven percent for next year,... especially after an even bigger increase this year.
The decision, however, is in line with President Moon Jae-in's election pledge to help the lowest-income earners in the nation.
But serious questions are being raised about its effectiveness.
According to our Oh Soo-young, both part-timers and small businesses... are reeling from the impact of the minimum wage hike.
Twenty-seven year-old Lim Seung-heon has been working part time jobs for the last seven years,... mostly at restaurants and convenience stores.
The 16-point-4 percent minimum wage hike this year meant he was taking home an extra 90 dollars a month,... but he says the raise came at a price.

"Some employers expect much more from us. More input. Looking more cheerful in front of customers. After the wage hike, my former employer at a convenience store explicitly asked two of us to cover work that four people used to do. I had no choice but to accept the situation while looking for other jobs."

At the same time, Lim says he understands his former employer's concerns.
Small businesses owners who mostly rely on part time workers have opposed the government's decision to raise the wage floor by 10-point-nine percent next year.
They say it's hard to keep their businesses afloat,... with labor costs expected to rise further throughout President Moon Jae-in's term.

"I don't know what I'm going to do because I can't possibly cut more jobs. I've been taking over my workers' shifts. I work about ten to twelve hours a day now. Fourteen some days. Many of us convenience store owners are barely making as much as our part time employees."

A survey shows 30 percent of convenience store owners have taken on at least five hours of extra shifts a week to keep costs down. Now, four in ten store owners work more than twelve hours a day.
Some have decided to simply close their shops early.
The trend has caused concern among economists.

"The profits of small businesses, at least 20% have taken a decline in profits and about a 30% decline in general sales. This is mainly because shop owners shortened their working hours so SMEs will be tremendously impacted. I think there will be unemployment for part timers as well."

On Tuesday, Prime Minister Lee Nak-yon admitted the wage hike would take a toll on small firms, and pledged the government would find "soft landing" solutions.
However, he said other factors like high rent and franchise fees are the main reasons for their financial troubles.
Economists and small shop owners have called for government action to tackle these issues,...as well as apply a different minimum wage rate for businesses that employ five workers or less.
Oh Soo-young, Arirang News.