Korea's small businesses face hardship despite government's support measures
- 6 years ago
Small business owners in South Korea have been crying out for government help to see them through a crisis triggered by the minimum wage hike.
Our Hong Yoo went our to meet with some businesses that are expected to benefit from the upcoming changes.
Empty seats rows after rows...
Silence overwhelms the PC cafe and only the sound of the owner cleaning can be heard.
The owner who used to have employees to take care of the shop is now working alone, all by himself, from 6am to 6pm.
The cafe is no longer open 24 hours because the owner cannot afford to pay his employees reflecting on the minimum wage increases for this year and next year... which rose 16-point-4-percent and 10-point-9-percent respectively.
"The decision to increase the minimum wage was just like telling us, "You now must pay them this much. No questions allowed." So for us, it's hard to keep our business going when the expenditure to maintain our business running keeps increasing."
It's a similar story for this restaurant as well.
Only one table is occupied by customers and the rest remain empty during lunch hour when it should normally be busy.
In response, the National Tax Service unveiled a set of measures last week including the postponing or scrapping of tax audits for small business owners until the end of 2019.
But it may come short when making a difference in helping the self-employed... estimated to make up 21 percent of Korea's working population.
"It is hard to understand why they came up with such measures because these days everyone uses credit cards to pay. So our income is already being accessible, and exempting us from tax investigation is not helpful at all."
A local expert say such measures fall short in terms of providing a primary solution... and called for mid-to-long term measures tailored to the needs of different regions and sectors... as well as measures that could lessen the burden of small business owners piling on debt.
"One of those ways could include expanding financial support for small businesses so that they could readily secure finances when they apply for small private loans."
A report by the Korea Institute of Finance released earlier this week showed the country's self-employed people are three times more likely compared to salaried workers to be suffering from repaying heavy debt.
Hong Yoo, Arirang News.
Our Hong Yoo went our to meet with some businesses that are expected to benefit from the upcoming changes.
Empty seats rows after rows...
Silence overwhelms the PC cafe and only the sound of the owner cleaning can be heard.
The owner who used to have employees to take care of the shop is now working alone, all by himself, from 6am to 6pm.
The cafe is no longer open 24 hours because the owner cannot afford to pay his employees reflecting on the minimum wage increases for this year and next year... which rose 16-point-4-percent and 10-point-9-percent respectively.
"The decision to increase the minimum wage was just like telling us, "You now must pay them this much. No questions allowed." So for us, it's hard to keep our business going when the expenditure to maintain our business running keeps increasing."
It's a similar story for this restaurant as well.
Only one table is occupied by customers and the rest remain empty during lunch hour when it should normally be busy.
In response, the National Tax Service unveiled a set of measures last week including the postponing or scrapping of tax audits for small business owners until the end of 2019.
But it may come short when making a difference in helping the self-employed... estimated to make up 21 percent of Korea's working population.
"It is hard to understand why they came up with such measures because these days everyone uses credit cards to pay. So our income is already being accessible, and exempting us from tax investigation is not helpful at all."
A local expert say such measures fall short in terms of providing a primary solution... and called for mid-to-long term measures tailored to the needs of different regions and sectors... as well as measures that could lessen the burden of small business owners piling on debt.
"One of those ways could include expanding financial support for small businesses so that they could readily secure finances when they apply for small private loans."
A report by the Korea Institute of Finance released earlier this week showed the country's self-employed people are three times more likely compared to salaried workers to be suffering from repaying heavy debt.
Hong Yoo, Arirang News.