hankyoreh

A federation of small business owners says that they have no choice but to strike over the meager compensation for losses

The South Korean government is expanding the scope of small enterprises and self-employed business operators eligible for compensation as it raises the social distancing level once again in response to rising COVID-19 cases.

It is also instituting a new disaster support fund to provide cash payments to those affected.

But the small business operators who are bearing the brunt of the distancing measures are accusing the government of merely shifting the suffering in their direction through its passive response, which includes maintaining the same loss compensation rate as before. The debate over whether to prioritize disease prevention or the livelihoods of these business owners is heating up once again, as self-employed business groups threaten a large-scale collective strike.

Convening a meeting of the emergency economic countermeasures headquarters Thursday, Finance Minister Hong Nam-ki said that the government plans to make full use of the budget, funds, and reserves to provide support in a multilayered way, including disaster support payments, expanded compensation, and support with low-interest rate loans.

In particular, the government plans to include restrictions on the number of customers allowed in particular businesses as one of the disease control measures subject to compensation. While compensation was previously provided only for losses incurred due to the inability to operate a business at all or after a certain time due to disease control measures, the new measures mean it will also be given in cases where losses result from attendance restrictions.

That means a number of businesses will become newly eligible for compensation, including barbershops, salons, amusement parks, and wedding halls, which are subject to attendance restrictions ranging from “one person per 4 square meters” to “50% of capacity.”

Lee Eun-cheong, director of the small business COVID-19 recovery support team for the Ministry of SMEs and Startups, said Thursday that the relevant enforcement decree would be “amended so that [those businesses] are included when compensation funds are provided next quarter.”

The government also plans to create a disaster support fund to provide preemptive assistance to small businesses. The funds will be made available to travel-related businesses and others that have been indirectly affected by the pandemic but were ineligible for past government support. Lee explained that the disaster support fund implementation plan is currently being discussed by the relevant agencies.

But some have criticized the government’s approach as being too passive, as it seeks to retain the current compensation minimum of 500,000 won and a compensation rate of 80% of losses.

“They’re reacting too late, when they should have set a broader range of compensation targets in the first place,” argued Woo Seok-jin, a professor of economics at Myongji University.

“The support needs to be stepped up, with the compensation rate increased to 100%,” he stressed.

Meanwhile, a federation representing self-employed businesses that have been impacted by COVID-19 announced plans for a large-scale strike next week.

“After the government’s announcement today, the group leaders met and agreed that we need to proceed with the strike,” said the federation’s co-representative Min Sang-heon in a telephone interview with the Hankyoreh, adding that the “methods and timeline will be decided on the morning of Dec. 20 [Monday].”

The six groups that make up the federation collectively have around 1.5 million members, with the federation predicting that at least one million would take part in the strike.

“With these strict distancing measures being implemented at the end of the year, we have no choice but to respond in this way,” said the federation’s co-representative Oh Ho-seok.

“We’re also preparing to calculate the amount of damages to file a class action suit,” he added.

The sense of despair among self-employed business operators has been palpable.

Kim Su-yeong, the 40-year-old proprietor of a barbecue restaurant in Seoul’s Yeongdeungpo District, said, “We’d gotten back up to 80% of our pre-COVID sales, and now that’s plummeted again.”

“All our reservations are getting canceled,” she lamented.

Kim Ji-myeong, the 75-year-old owner of a nearby chicken restaurant, said, “I did receive compensation before, but it amounted to just 5% of fixed costs.

“I have zero expectations,” they said.

By Lee Jeong-hun, Lee Woo-yun and Ko Byung-chan; staff reporters

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