Even Fragmented Employment is Burdensome for Small Business Owners... Minimum Wage System Needs Reform

"The minimum wage system has already reached the end of its lifespan. The new government should consider fundamental reforms, including the abolition of the minimum wage system."

Song Chi-yeong, Chairman of the Small Business Association (photo), said on the 27th, "The minimum wage in our country has risen every year for the past 38 years without exception," and "It is already at a higher level compared to Japan (9400 won) and Taiwan (7900 won), which undermines product price competitiveness and further erodes national competitiveness."

Chairman Song, who took office as the head of the Small Business Association in November last year, is focusing on strengthening internal stability. In particular, Chairman Song pointed out the minimum wage as the biggest issue facing small business owners. Due to the economic downturn this year, the closure of small businesses, which reached 940,000 last year, is expected to exceed 1 million this year. He noted that the current minimum wage level has already risen to a point where small business owners cannot afford it.

Chairman Song said, "Small business owners are in a situation where their margins are shrinking as raw material prices rise," and "For this reason, they are hiring mainly 'fragmented part-timers' who work less than 15 hours a week, and even this is difficult, leading to operations run by family members, exacerbating the difficulties."

He added, "Recently, I went to Noryangjin Fish Market, and only about half of the stalls were occupied. Even during the 'Corona Pandemic (global pandemic),' it was hard to find empty spots," and "When you actually visit small business sites, they say it's even harder than during the Corona pandemic."

For these reasons, Chairman Song emphasized that the new government should address the minimum wage system first. Currently, discussions on next year's minimum wage are underway, centered around the Minimum Wage Commission. The Minimum Wage Commission, composed of 27 members, including 9 representatives each from employers, workers, and public interest members, held its second plenary meeting today following its first meeting on the 22nd of last month.

Chairman Song also emphasized that the new government should operate △a Deputy Minister for Small Business Affairs under the Ministry of SMEs and Startups △a National Small Business Research Institute (tentative name) △and an internet specialized bank for small businesses.

He stated, "There are about 7.6 million small business owners nationwide, and a related research institution is essential to implement policies for them in conjunction with the Deputy Minister," adding, "Both the ruling and opposition parties have included an internet specialized bank for small businesses in their pledges, and it must be implemented after the new government takes office."

Furthermore, he raised the necessity of expanding and reorganizing the 'New Start Fund,' which currently supports closures due to the Corona pandemic.

Meanwhile, Chairman Song plans to focus on increasing the number of association members during his term. The number of association members, which was about 750,000 before his inauguration, has increased to about 800,000 since Chairman Song took office.

He explained, "The goal is to reach 1 million members during my term," and "Through this, the association will grow into an organization that represents the voices of all small business owners nationwide."


butter@fnnews.com Kang Kyung-rae Reporter