62% of Korean SMEs call for minimum wage reduction

[Photo by Yonhap]

Six out of ten small and medium-sized enterprises (SMEs) in South Korea believe that the minimum wage for 2025 should either be reduced or frozen, a recent survey showed.

The Korea Federation of SMEs (KBIZ) announced on Sunday that 61.6 percent of 600 SMEs employing minimum wage workers expressed this sentiment.

The survey results indicate that 23.5 percent of respondents support a 2 to 3 percent increase in the minimum wage, while 8.7 percent favor an increase of around 1 percent.

SMEs cited “minimum wage increase” as the most significant factor for a detiorating business environment, with 64.8 percent identifying it as a primary concern.

[Graphics by Song Ji-yoon and Minu Kim]

In addition, 80.3 percent of SMEs reported that the current minimum wage of 9,860 won ($7.12) is burdensome given the current business conditions. Smaller enterprises, particularly those with annual sales under 1 billion won, are feeling the pinch more acutely, with 74 percent highlighting the minimum wage hike as a detrimental factor. Notably, 87 percent of these smaller companies indicated that the current wage level is more burdensome than the average response.

Lee Myung-ro, head of the Labor Policy Division at the Korea Federation of SMEs (KBIZ) emphasized the need to consider the payment capacity of small businesses, which form a significant part of the economy, in the 2025 minimum wage decision.

“Given the high proportion of small self-employed businesses in our economy, it’s crucial that the minimum wage for 2025 takes into account their ability to pay these wages,” Lee said.