'Work-Life Balance+4.5' budget doubles from 27.6 billion to 56.8 billion won in a year

Business owners warn a 4.5-day week would force small firms to shut down

Delivery deadlines, labor shortages and thin margins make even the 52-hour week a struggle

[Image generated using ChatGPT]
[Image generated using ChatGPT]

"If a 4.5-day workweek becomes the norm, small and medium-sized enterprises will all have to shut down."

The head of an auto parts company with 40 years in the business made the remark when asked whether he would consider joining the government's Work-Life Balance+4.5 project. He said his firm simply has no room to cut working hours, let alone apply for the program. "In small and medium-sized manufacturing, the factory stops if people aren't working," he said. "The reality is that meeting delivery and export deadlines already makes it hard to stay within the 52-hour weekly limit."

The government plans to nearly double the budget for its 4.5-day workweek support program starting next year. Under the 2027 budget bill approved Tuesday, funding for the Work-Life Balance+4.5 project will rise from 27.6 billion won ($20.1 million) this year to 56.8 billion won next year. The program subsidizes companies with 20 or more employees that reach a labor-management agreement to reduce working hours without cutting pay, providing 200,000 to 600,000 won per worker per month. As of late July, 293 companies had joined. The move signals the government's push to extend shorter actual working hours — including the 4.5-day week — to small businesses.

Most participating companies, however, tend to be office-based businesses in sectors such as IT, or firms with the capacity to introduce automation, improve processes or hire additional staff. "There are about 8.5 million small and medium-sized enterprises in South Korea, and 300 is a tiny fraction," said an official from a small business industry group. "For labor-intensive manufacturers, joining a 4.5-day workweek support program is realistically very difficult." Those on the ground are skeptical that a larger budget will translate into significantly more applicants.

The biggest obstacle is delivery deadlines. Foundational industries such as plating, casting, forging and welding are tightly interlocked with upstream and downstream production processes, leaving individual firms little room to adjust their own schedules. "There are cases where an order comes in on Wednesday and the client wants the goods by Thursday," said the head of one manufacturing firm. "Countless companies work through the weekend." He added that with orders increasingly shifting to China and other overseas suppliers amid fierce domestic competition, cutting working hours is simply unthinkable.

Labor shortages and low supply prices compound the problem. Reducing working hours while maintaining output ultimately requires hiring more people — but small manufacturers already face a chronic shortage of workers. Passing higher labor costs on to clients through higher supply prices is equally difficult. "If we could get proper unit prices, we could hire more people and maybe even move to a four-day week," said the head of a surface-treatment company. "But as the weaker party in the relationship, we can't just raise prices on our own. Before telling us to cut working hours, the government should first create conditions where we can actually negotiate fair supply prices."

Non-manufacturing small businesses face much the same situation. One engineering firm has invested in employee welfare — including flexible working arrangements to attract skilled workers — but says adopting a 4.5-day week is a step too far. "A lot of our work runs on a daily cycle, so a 4.5-day week is in effect a four-day week. Lose a day and sales fall by the same amount," the firm's head said. "In technical services and manufacturing, output is directly proportional to the hours people work. Telling small businesses to cut hours while competition is this fierce is essentially telling them to fall behind."

On the ground, there is also widespread concern that today's voluntary support could eventually become a legal obligation. Small business owners said they worry the program will follow the same path as the five-day workweek, which started as an incentive before becoming mandatory. They called on the government to allow companies that need longer hours — whether because of the nature of production or because workers themselves want to put in extra time — to manage working hours flexibly according to their industry and circumstances.


hong@heraldcorp.com
snsd@heraldcorp.com