More Small Businesses Have Trouble Paying Staff
17 October, 2020
Smaller and smaller businesses that employ fewer than five staff were not able to pay them even prior to the coronavirus epidemic due to a steep rise in the minimum wage.
According to data from the Ministry of Employment and Labor, the number of workers employed by smaller businesses who went unpaid surged 16.8 percent from 2017, when President Moon Jae-in took office, until this past year, or from 128,936 to 150,674.
The number of back wages they were owed soared 45 percent from W363 billion to W526 billion over the period (US$1=W1,149). The trend was especially marked in organizations with less than five staff.
The primary reasons were the economic downturn and a sharp surge in the minimum wage. The hourly minimum wage jumped 32.7 percent from W6,470 in 2017 to W8,590 this past year.
Small businesses owed personnel W337.1 billion in wages in the first eight months of this year, accounting for an astounding 32.8 percent of total back pay and up from 29.1 percent in 2018 and 32.3 percent in 2019.
Main opposition People Power Party lawmaker Hong Suk-Joon said, "Small businesses are bearing the brunt of the government's failed monetary policies, and the coronavirus epidemic only made things worse."
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