Small Businesses Cut Business Hours Over Minimum Wage Hike
10 January, 2019
Many small businesses are cutting business hours as the minimum wage rises by another 10.9 percent this year. They close their shops early to save mounting labor costs.
The result is that the minimum wage hike does not benefit those it was aimed at helping.
"You can't earn enough to pay part-timers and electricity bills if you stay open until the small hours when few customers come," one small business owner said. "It's much better to close early and call it a day."
A man puts up a notice of his restaurant's business hours in Seoul on Tuesday.
Many restaurants have cut business hours because they have a relatively high ratio of staff, while others save costs by laying off part-timers.
One galbi or rib restaurant in Seoul's upscale Gangnam district used to open from 6 p.m. to 2 a.m. but now decided to close an hour early and on Saturdays. "Most of our customers are office workers, so I've decided to close on Saturdays."
Samsung Card analyzed credit card spending patterns from August to November last year and found that the use of corporate credit cards in restaurants fell 6.7 percent on-year after 9 p.m., meaning there were fewer drinking parties after hours.
In a straw poll of 1,204 small businesses by the Korea Federation of Micro Enterprise in December last year, 26.4 percent said they have cut business hours and 16.9 percent the number of staff.
A federation official said, "The first step is to cut business hours, the second step to lay off workers, and the last is to go out of business."
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