Six out of ten small and medium-sized enterprises responded that next year's minimum wage should be frozen or lowered.
On the 15th, the Korea Federation of Small and Medium Enterprises announced the results of a survey on 'difficulties and opinions regarding minimum wage' conducted with 1,170 small and medium-sized enterprises.
According to the survey results, 72.6% of small and medium-sized enterprises answered that the current minimum wage level is a burden on management. It was found that 66% responded that next year's minimum wage needs to be frozen or lowered.
Regarding next year's minimum wage level, 75.3% of businesses with sales of less than 1 billion won and 73% of companies with fewer than 10 employees answered that it should be frozen or lowered. This suggests that smaller corporations are feeling the pressure from minimum wage increases more acutely.
The response that the minimum wage should be lowered was 22.2%, an increase of 2.8% from the previous year. This is influenced by small and medium-sized enterprises and small business owners facing limits amid a deteriorating business environment, including sluggish domestic demand. In fact, 64.1% of small and medium-sized enterprises reported that their business situation has worsened compared to the previous year.
Among the major labor factors deteriorating the business environment, 54% of small and medium-sized enterprises cited the increase in minimum wage, followed by increases in social insurance premiums (37.6%) and labor shortages (29.7%). If they find it difficult to cope with the minimum wage, 45.8% of small and medium-sized enterprises indicated that reducing existing staff or cutting back on new hires would be their response. The response indicating a reduction in existing staff increased from 6.8% in last year's survey to 23.2%.
Regarding urgent improvements needed in the minimum wage system, 33.2% of small and medium-sized enterprises prioritized 'differential application for certain vulnerable sectors,' while 31.8% responded that the decision cycle should be extended from one year to more than two years.
By sales size, 38.8% of those with less than 1 billion won in revenue and 37.2% of companies with 1 to 9 employees felt the need for a differential application, indicating that smaller corporations are more keenly aware of this necessity.
Lee Myung-ro, head of the manpower policy department at KBIZ, said, "The minimum wage system relies on the payment capacity of corporations," and added, "For sectors with low minimum wage acceptability, a differentiated application by type should be introduced, and minimum wage increases or freezes should be minimized to alleviate corporate burdens and restore the economy's innovation and growth momentum."