A sharp increase in the minimum wage has sent the prices of products and services soaring.
Manufacturers claim that they cannot help raising product prices to pay wages. The minimum wage hike has not only made it harder for small businesses to keep staff on but has sent consumer prices through the roof.
Statistics Korea compared the prices of some 40 most popular dishes and said that the cost of eating out rose 2.7 percent in the first 10 months of this year compared to the same period of 2017, the biggest increase since 2011.
Many office workers already started worrying that how much more money they have to spend eating out next year when the minimum wage will increase by another 10 percent.
Housewife Bang Yoon-jung (32) said, "I only fill up half of my shopping cart in the supermarket and the bill already totals more than W100,000 (US$1=W1,135). I have to pay about W10,000 more than I did last year for a week's worth of groceries."
According to the Korea Consumer Agency, the prices of 21 out of the 30 most popular groceries have risen since last year, and the prices of 16 have doubled since October. Major food manufacturers have all raised prices almost every month this year.
Next year the minimum wage increases another 10.9 percent, and prices are expected to rise apace. One owner of a coffee shop in northern Seoul used to pay around W1.8 million to three part-time workers, but when the minimum wage increased 16.4 percent this year that rose to W2.1 million.
"When the minimum wage increases further next year, I will have to pay them W2.4 million, or I'll have to cut down on the number of hours they work."
Another owner of a fried chicken franchise in Hanam, Gyeonggi Province said, "The proportion of staff wages to sales will rise from 21 to 22 percent at present to 25 percent next year. I'll have no choice but to cut the number of hours that part-time staff work at weekends from six to four or raise prices of my menus by W1,000 to W2,000."
The situation is the same for big businesses. One restaurant chain operated by a big conglomerate estimates that the proportion of total wages for part-time staff will rise from 60.6 percent this year to 63.6 percent in 2019.