Korea Enterprises Federation survey on self-employed business conditions in 2026

More than half say conditions have worsened from last year

High oil prices from Middle East conflict squeeze operating costs

Minimum wage hike would push up prices and cut hiring, owners warn

56.6% of accommodation and restaurant operators call for freeze next year

Owners urge differentiated minimum wage by sector and region

A restaurant district in Yeouido, Seoul. [Yonhap]
A restaurant district in Yeouido, Seoul. [Yonhap]

One in three self-employed workers in South Korea earns less than the minimum wage, according to a survey commissioned by the Korea Enterprises Federation. The federation, known by its Korean acronym KEF, asked polling firm Mono Research to survey 500 self-employed workers nationwide on their business conditions in 2026. Results showed that 34.0 percent of respondents reported average monthly income below the minimum wage of 2,156,880 won (about $1,410), based on a 40-hour workweek.

With raw material costs rising on the back of high oil prices stemming from the Middle East conflict, the largest share of respondents — 44.6 percent — said the minimum wage should be frozen next year.

The KEF released the findings Monday. One in three self-employed workers (34.0 percent) earned less per month than the minimum wage. Another 19.8 percent said their average monthly income fell between 2.5 million won and 3 million won. The next most common responses were income at or above the minimum wage but below 2.5 million won (17.0 percent), followed by income between 3.5 million won and 4 million won (11.4 percent).

Some 57.0 percent of respondents said their business conditions had worsened this year compared with last year. Only 8.4 percent said conditions had improved, while 34.6 percent said they were about the same as last year.

Breaking down worsening conditions by sector, wholesale and retail trade came first at 66.3 percent, followed by accommodation and restaurants at 65.8 percent, arts, sports and leisure services at 58.2 percent, and transportation and warehousing at 53.3 percent.

Asked about the appropriate rate of increase for next year's minimum wage, 44.6 percent of respondents said it should be frozen — the most common answer. That was followed by a raise of 1 to less than 3 percent (20.6 percent), a reduction (13.0 percent), and a raise of 3 to less than 6 percent (12.6 percent).

Among those who favored a freeze, the share was highest in the accommodation and restaurant sector at 56.6 percent, followed by manufacturing at 44.4 percent and education and services at 44.1 percent.

If the minimum wage rose by 1 to less than 3 percent, 12.2 percent of respondents said they would consider forgoing new hires or reducing their existing workforce. That figure was 11.6 percent for a raise of 3 to less than 6 percent.

Asked at what rate of minimum wage increase they would consider closing their business, one in four self-employed workers (25.2 percent) said they were already at their limit. A further 14.6 percent said they would consider shutting down if the minimum wage rose by 1 to less than 3 percent, and 12.0 percent said the same for a raise of 3 to less than 6 percent.

One in three self-employed workers (37.6 percent) said they already plan to raise their prices at the current minimum wage of 10,320 won per hour. An additional 25.6 percent said they would consider raising prices if the minimum wage increased by 1 to less than 3 percent, and 16.0 percent said the same for a raise of 3 to less than 6 percent.

The KEF said that with import prices for raw materials surging amid sustained high oil prices caused by the Middle East war, any minimum wage increase would add to operating costs and could push up consumer prices by forcing business owners to raise their selling prices.

Self-employed workers identified several priorities for reform: limiting the rate of increase based on economic conditions (24.3 percent), applying differentiated minimum wages by sector and region (21.9 percent), and supplementing the criteria used to set the minimum wage — including employers' ability to pay (15.9 percent).

The KEF noted that 33.9 percent of accommodation and restaurant workers already earn below the minimum wage, and argued that differentiated minimum wage rates should be considered for sectors with limited capacity to pay.

Lee Sang-ho, head of the KEF's economic division, said a more careful approach was needed — one that applies the minimum wage differently by sector and takes comprehensive account of employers' ability to pay, employment conditions and the broader economic situation — so that the difficulties facing self-employed workers are adequately reflected in how the minimum wage is set and applied.


joze@heraldcorp.com