| Members of the 430,000-strong Korea Foodservice Industry Association hold a rally against the planned rise in next year's hourly minimum wage at Gwanghwamun, Seoul, Monday. Korea Times photo by Hong In-ki |
By Lee Kyung-min
A group of small restaurant owners is holding a series of protests that will culminate in a large-scale rally against the "unbearably steep" rise in next year's hourly minimum wage, which they claim will harm their businesses.
The 430,000-strong Korea Foodservice Industry Association (KFIA), representing about two-thirds of eatery owners, started the protests in Gwanghwamun, Seoul, Monday, which will continue through next week. Up to 30,000 restaurant owners will gather for the rally, Aug. 29.
Their action follows the announcement of next year's minimum wage being set at 8,350 won ($7.40), up 10.9 percent from this year's 7,530 won.
"The rapid increase of the minimum wage is a death sentence to small business owners who are poorer than their employees," the group said in a statement. "We ask whether the increase is an innovative policy spearheaded by President Moon Jae-in as it only worsens the conflict between two economically strained groups of people _ small enterprise owners and their employees."
The economy will crash if the government continues to dismiss the voices of small business owners who create jobs, the group added. "Jobs at the lower end of the economic scale are disappearing fast. The government and lawmakers should hold talks with us, whose lives are affected directly by government policy."
Lee Jong-whan, 63, head of the KFIA's Seoul branch, said unless the administration comes up with plans to help prevent a marked drop in both the number of customers and revenue; he will have no option but to cut employees' working hours.
"Employers are able to hire and pay their workers only when they make money. The minimum wage hike has only resulted in layoffs and the shuttering of businesses," said Lee, who runs a Korean restaurant in northern Seoul with six workers.
"Since early this year, I have been paying up to 2.5 million won per worker in monthly wages, a 300,000 won increase from last year's 2.2 million won due to this year's increased minimum wage. But if the government pushes ahead with the hike again next year, it means I will have to give them nearly 300,000 won more again. I can't do that. I will go bankrupt," he said.
"There are only two ways to keep my business alive: cutting either the number of workers or their working hours. In the latter case, the hours must be filled in by me or my family members, who are considered unpaid workers."
Over 80 percent of the group members run restaurants with less than five workers, and their protest represents the shared sense of anger, he added. "Many of our members reduced their workforce by about a third in the first half of the year because they had no way of paying for rent, food ingredients, delivery costs and salaries of workers and cleaning crews. If the situation continues, more people are sure to lose their jobs in the coming months."
Pressured by the wage hike, many owners had to increase food prices, but instead of making ends meet, they've lost customers.
Data from the Korea Consumer Agency in June showed the price of seven out of eight popular dishes sold in Seoul's eateries increased 10 percent over the past year. The food items mostly cost less than 10,000 won including cold noodles, gimbap and bibimbap.
Amid the situation, leaders of business lobby groups met with Employment and Labor Minister Kim Young-joo, Monday, and spoke of the need to lower the burden on business owners following the confirmed hike in next year's minimum wage. The groups included the Korea Chamber of Commerce and Industry, the Korea Employers Federation, the Korea Federation of SMEs and the Korea Federation of Micro Enterprises.