BUSINESS

Survey shows employees fear job cuts following minimum wage hike

By Julie Kim Jackson
  • Published : Jul 24, 2017 - 15:46
  • Updated : Jul 24, 2017 - 17:50
More than half of Korea’s part-time employees are concerned about potential job cuts due to the government’s minimum wage hike starting next year, according to a survey conducted by Albamon, a portal site operated by Job Korea, on Monday.

The survey of 3,955 part-time workers and 656 employers showed that 72.9 percent of participating part-time workers expressed concerns about the upcoming minimum wage increase, while 90.5 percent of employers said they were concerned.

Earlier this month the government announced its decision to increase Korea’s minimum wage by 16 percent to 7,530 won ($6.75) per hour next year, marking its biggest jump since 2000. President Moon Jae-in also went on to pledge that his administration would strive to raise the minimum wage to at least 10,000 won by 2020.

(Yonhap)

Albamon’s survey results revealed that 61.3 percent of part-time workers said it would be possible for minimum wage to be increased to 10,000 won, while 72 percent of employers said it would be impossible. As for next year’s 7,530 won per hour wage increase, 76.8 percent of employers said the figure is “higher than expected,” while 41.7 percent of employees said the wage was roughly what they expected. 

Among the part-time workers, 51.8 percent said job cuts were their biggest worry, followed by 46 percent expressing concerns about their employers’ losses caused by the wage hike and 34.3 percent saying they are worried about the potential of increased workloads.

In the case of employers, 67.5 percent voiced concerns over an increase in part-time labor costs, while 25.3 percent said they worry about the accompanying cost increases in late shift duties and holiday pay.

Moon’s minimum wage initiative has stoked heated debate in the country with proponents and opponents basing their arguments on studies on the economic impact of the minimum wage raise and citing different public surveys.

According the Korea Center for International Finance report released Friday, while the government’s minimum wage raise next year may help boost economic consumption, it is also expected to cut profits at local convenience store and discount chains as well as increase the financial burden of independent businesses and small stores.

Following the government’s announcement, Gallup Poll Korea found President Moon’s approval rating dropped 6 percentage points last week compared to the previous week. 

By Julie Jackson (juliejackson@heraldcorp.com)