Nine out of 10 small and mid-sized businesses are against government plans to raise the minimum wage to W10,000 an hour, and a majority claim they would have no choice but to cut down on staff or hiring (US$1=W1,150).
The Small and Medium Business Administration polled 332 SMEs last month on their views on the minimum wage hike and found that 56 percent would cut down on new hires.
Some 41.6 percent said they would lay off existing staff, 28.9 percent they would have to close their business completely, 14.2 percent they will slash pay and 6.3 percent they would think of moving abroad.
Only 10.2 percent said they will comply with the minimum wage hike.
Asked about the expected impact of the minimum wage being raised to W10,000 an hour by 2020, 55 percent said they could end up bankrupt. Instead, some 36.3 percent of respondents wanted the minimum wage to be frozen at the present level, 26.8 percent wanted to cap the hike at three percent and 24.7 percent at five percent.
Jeong Wook-jo at SMBA said, “If the minimum wage is raised steeply without paying heed to the difficulties facing small and mid-sized businesses, we could end up seeing job losses rather than a more equal distribution of wealth”.