minimum wage of 7530 won coming in 2018, small biz will suffer

With the minimum wage of 7530 won coming in 2018, the sighs of businessmen who run the franchise are deepening.

The minimum wage committee decided in July to raise the minimum wage in 2018 by 16.4% from 6470 won in 2017 to a minimum wage of 7530 won in 2018. 

A business or an employer who violates the minimum wage from January 1 to December 31, 2018 must impose a penalty of 3 years or less or a fine of 20 million won or less. 

With the minimum wage, interest rate hike, and intensifying competition, it is anticipated that the household budget of small business owners will be further reduced. 

According to the Korea Food Service Industry Research Institute under the Korea Food and Drug Administration, if the minimum wage increase rate is set at 15.7 percent per year based on changes in the personnel expenses and management structure of the food service industry, it is estimated that labor costs next year will increase by 2.1 trillion won. 

"The franchise industry, such as chicken, pizza and hamburgers, employs mostly part-time workers and delivery workers, but if the minimum wage goes up, you have to consider measures such as reducing the number of employees or reducing working hours, "We have to raise the wages of the employees in the situation that the rents of the store and the prices of the commodities are going up, and it becomes hard to eat more and more." 

The minimum wage is increasing every year from 6030 won in 2016 to 6470 won in 2017.