Part-time workers may suffer amid rising labor costs

An unmanned coffee store is open in western Seoul on Thursday, a day after the Minimum Wage Commission set the minimum hourly pay for 2024 at 9,860 won ($7.8), up 2.5 percent from this year. [NEWS1]

Employers are slashing the work hours of part-timers ahead of a 2.5 percent rise in the minimum hourly wage in 2024.

The Minimum Wage Commission on Wednesday concluded a 110-day wage negotiation to set next year's minimum pay at 9,860 won ($7.8) per hour, marking the second-lowest wage hike ever. The lowest was a 1.5-percent increase in 2021.

However, the minimum wage is still relatively high for small- and medium-sized enterprises and the self-employed, as it has risen 48.7 percent in six years, including two straight double-digit increases in 2018 and 2019.

“It’s unfortunate for part-timers, but we received guidance to send them home early to cut back on holiday pay,” a 25-year-old employee who works at the back office of a theme park near Seoul told the JoongAng Ilbo Thursday.

Employers in Korea have to guarantee at least one day of paid holiday per week to employees who work more than 15 hours a week under the Labor Standards Act. This translates into a “holiday pay” on the employee’s paycheck, rendering the actual hourly pay to exceed 11,000 won.

The theme park’s management distributed the workforce reduction policy around June when the minimum wage for next year was widely expected to rise, according to the source.

The park had three groups of part-timers working five hours per day each between 10 a.m. and 8 p.m., but the change in the minimum wage means that some will be left to work less than 15 hours a week.

“Part-timers in the past welcomed wage hikes but it makes them nervous these days,” the theme park official added.

The surge in minimum pay encouraged some business owners to open unmanned stores, free from the rising cost of labor.

There were 267 unmanned ice cream shops franchised in Korea in 2018, which grew to 1,405 in 2021, according to the Fair Trade Commission’s information disclosure system. The tally would have multiplied more than five times if non-franchise stores were included in the sum.

Most Koreans believe the country’s minimum wage is too high, a survey showed.

Fifty-two percent of the 1,000 people between the ages of 19 and 59 surveyed by a research firm M-Brain Trend Monitor in June said it is challenging for Korea’s economy to set the minimum wage to a level on par with some other developed countries.

Young Koreans were more concerned about the high minimum salary. Six out of 10 people in their 20s said the minimum pay is a burden for the economy, while 51.6 percent of those in their 30s, 50.8 percent of those in their 40s and 48.4 percent of those in their 50s felt the same.

One out of two respondents said the Yoon Suk Yeol government needs to slow down wage hikes. Those in their 20s agreed with the idea the most at 53.2 percent.

BY YI WOO-LIM, SOHN DONG-JOO [sohn.dongjoo@joongang.co.kr]