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"Wages keep rising, but as soon as things get a little tough, Korean students tend to disappear. It's honestly easier to hire international students."

Mr. Lee (58), who runs a gukbap restaurant in Namdaemun Market, Jung-gu, Seoul by employing foreign workers, wiped the sweat from his brow as he spoke. Inside the restaurant, three employees from Vietnam and Malaysia expertly carried boiling earthenware bowls. Lee shared, "If I tell a Korean part-timer to go home an hour early because there are no customers, they complain that it's 'cutting their hours early,' but foreign workers agree cheerfully." He added, "It's easier to adjust work hours and I can schedule staff just for the busy peak times, which is why I end up hiring foreign workers."

Foreign workers are preparing food at a gukbap restaurant in Namdaemun Market, Jung-gu, Seoul. Around Namdaemun Market, as the burden of labor costs increased due to the minimum wage hike, the number of self-employed business owners hiring foreign workers is growing. Photo by Hosoo Park

Due to the minimum wage hike, self-employed business owners are increasingly hiring foreign workers instead of Koreans, as it is easier and more flexible to adjust their shifts, which helps lessen the labor cost burden. Concerns are being raised that this trend could reduce job opportunities for young people and intensify distortions in the labor market, such as increased illegal employment of undocumented workers at low wages.

According to the Ministry of Employment and Labor on July 24, the Minimum Wage Commission set the minimum wage for next year at 10,700 won per hour. This is a 3.7% increase from this year, surpassing the increase rates for 2025 (1.7%) and 2026 (2.9%). Based on a 40-hour workweek, this translates to a monthly salary of 2,236,300 won. When factoring in the weekly paid leave allowance, the effective hourly wage amounts to 12,840 won. This figure exceeds the 2,088,000 won monthly average operating profit for small business owners surveyed by the Korea Federation of Micro Enterprises.

Park Jisu (43), who runs a pho restaurant in Jongno-gu, Seoul, said, "After paying rent, food costs, and taxes, there are months when the part-timer actually takes home more than the owner." Park added, "These days, some job agency brokers openly advertise that you can pay undocumented workers less per hour. Sometimes, when the economy is this tough, it's tempting to consider it."

The burden felt by the self-employed is also evident in the statistics. In a recent survey conducted by the Korea Federation of Micro Enterprises, 87.0% of respondents said they are struggling with the current minimum wage level. Among businesses with employees, 92.7% reported that the minimum wage increase has reduced their operating profit. When asked how they were coping with the increased labor costs, the most common answer was "reducing employment or halting new hires" at 38.4%. They plan to manage the burden primarily by cutting back on hiring.

While employment of Koreans has declined, the increase in foreign hiring is intensifying challenges. Foreign workers are also entitled to the minimum wage and Labor Standards Act like Koreans, but some business owners are reducing labor costs by hiring multiple short-term workers for less than 15 hours per week, which exempts them from having to pay the weekly paid leave allowance. The view that foreign workers are more flexible about adjusting their working hours is spreading throughout the field.

Indeed, self-employed business owners in university neighborhoods and major market areas in Seoul are recruiting foreign labor via platforms designed for foreigners, or through social networking services (SNS) such as Xiaohongshu and WeChat. Park Insook (59), who runs a clothing store near Hongik University Station, said, "Southeast Asian part-timers are actually better because they can translate for tourists."

According to an analysis by job portal AlbaCheonguk, the total number of applications for part-time jobs between January and May this year dropped 21.8% compared to the same period last year, while the number of job postings open to foreign applicants surged by 88.3%. In particular, job postings for foreign workers in the food and beverage sector soared by 79.0%. Employer satisfaction was also high: 32.3% answered they were "very satisfied" with hiring foreign part-time workers, and 22.6% said they were "mostly satisfied," meaning more than half expressed satisfaction overall.

Experts warn that the minimum wage hike will increase dependence on foreign labor among the self-employed and could shrink job opportunities for young people. Lee Hongjoo, professor of consumer studies at Sookmyung Women's University, said, "If the burden of labor costs drives self-employed business owners to hire foreign workers or shift to automation, the first to lose job opportunities will be young people." Lee emphasized the need for reforms to reflect on-the-ground realities, such as differentiated wage application based on each sector's ability to pay.

This content was produced with the assistance of AI translation services.