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According to a survey, 75.3% are facing difficulties in running their businesses this year.
According to a survey, 75.3% are facing difficulties in running their businesses this year.

South Korea Businesses to File Compliant Over Minimum Wage Hike

South Korea Businesses to File Compliant Over Minimum Wage Hike

South Korea’s major business lobby said Sunday it will file an official complaint against the government’s decision on next year’s minimum wage hike, expressing concerns over its adverse impact on small entities and the job market.
Earlier this month, the tripartite commission of the government, labor and management decided to increase the minimum hourly wage by 10.9% to 8,350 won ($7.35) for 2019. Calling for a freeze, the management members boycotted the negotiations for the wage decision, Yonhap reported.
Issuing a release Sunday, the Korea Employers’ Federation said it will present an objection to the labor ministry on Monday calling for revisiting the case, as the decision “would have too much burden on small business entities and hinder job growth.”
According to law, representatives of labor and management are entitled to file complaints within 10 days of official notification of the annual wage decision. The deadline for this year is July 30.
Once the objection is submitted, the labor minister has a say in whether to reexamine the minimum wage, though there has not been a single such case so far.
According to the survey by the Korea Federation of SMEs on 300 small merchants and self-employed people, 74.7% said they would not be able to sustain the minimum wage level for next year.
The poll also found that 75.3% “are facing difficulties in running their businesses this year,” with the largest share, or 61.1%, citing sluggish domestic demand as a major reason, followed by 57.7% pointing to rising labor costs and 30.1% blaming fierce competition.
As countermeasures on their own, the largest number of the respondents, or 53.1%, said they are mulling cutting back on employees, followed by 30% planning more efforts to have a competitive edge, 13.3% mentioning a plan to raise product prices and 11.5% considering a shutdown.
After gathering responses from small and midsized firms, K-BIZ said it plans to file their own complaint with the labor ministry later this week.
“Based on opinions from our members, we will propose supplementary measures to the government to relieve their burdens,” its official said.

 

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