Minimum wage increase has few fans

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Minimum wage increase has few fans

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As the government pushes ahead with its plan to raise the hourly minimum wage to 10,000 won ($8.90) by 2022, opposition is coming from an unlikely group: part-time workers that stand to benefit most from the increased pay.

A survey released Monday by job search site Albamon showed 72.9 percent of part-timers surveyed and 90.5 percent of shopkeepers that hire them were worried about the increase in the minimum wage. Employers are concerned about how they will pay their workers - and workers are worried the cost-cutting will lead to layoffs.

Albamon surveyed 3,955 part-time workers and 656 employers.

Another job search site, Alba Heaven, surveyed store owners on how they plan to deal with the higher minimum wage. The government is set to raise the minimum wage next year by 16.4 percent, the highest jump since 2001, to 7,530 won.

About 80 percent of shopkeepers said they plan to reduce the number of part-time workers at their store.

Nearly a quarter of respondents said they would cut their part-time staff in half, and about another quarter said they would trim their workforce by 10 to 20 percent. About a fifth of respondents said they would hire more family members and relatives instead. Alba Heaven surveyed 352 shopkeepers, and multiple answers were allowed.

Daumsoft, an online research firm, analyzed more than 700 million Twitter posts, blog posts and news site comments related to the minimum wage last week and found that more people reacted negatively than positively to the hike.

According to the study, 68 percent of all posts showed negative feelings toward the minimum wage increase, while only about 34 percent thought positively about it.

“There are lots of people in my age group who are willing to work at companies regardless of salary and benefits,” a job seeker in his 30s said, “because we believe it is better for us to get jobs as soon as possible in order to have the chance of finding new ones after building up a career.

“I really hope the minimum wage increase won’t drag down the number of available jobs in the country,” he added. “It is already very competitive to find one.”

The government and labor groups have defended the raise as a way to reinvigorate the economy and reduce the country’s pay gap between rich and poor. They argue it will raise the income of workers around the country and boost consumption.

Jeong Won-il, an economist at Yuanta Securities, believes the minimum wage increase next year will deliver mixed results.

“The minimum wage will go up by more than 15 percent, and this is a very significant change that might lead to raising the unemployment rate,” he said. “The inflation rate is currently about 2 percent, and the minimum wage is going up a lot faster than that. Employers and job seekers will take different actions due to the drastic change, and it might lead to boosting domestic consumption temporarily.

“But in the long term,” he warned, “it might have the negative impact of lowering the real purchasing power due to inflation.”

Since employers face greater burden hiring part-time workers, many industries are investing in self-service features. They believe it will also be better for them in the long run.

The Korea Oil Station Association, a group representing gas station owners, has been receiving many phone calls from its members asking how they can turn their gas stations into self-service ones. It costs about 100 million won to make the change, but owners believe it is better for them to front that cost than pay for labor.

There are about 50,000 people working at gas stations across the country, and if 10 percent of gas stations become self-service ones, about 5,000 people will lose their jobs.

Many fast-food chains have already adopted self-ordering kiosks that allow customers to purchase items without interacting with a cashier.

Lotteria, a burger chain, currently has 42 percent of its 1,352 stores across the countries using the kiosks, and about 43 percent of McDonald’s 440 locations have kiosks.

“The financial burden stemming from labor costs will expedite entrepreneurs adopting self-service features,” said Choi Seung-jae, president of the Korea Federation of Micro Enterprise, a group representing small businesses. “We will soon be living in a society where customers pay, pick up and eat all themselves.”


BY KIM YOUNG-NAM [kim.youngnam@joongang.co.kr]




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