Impeachment has lost 10 million won in sales in 10 days. "Don't miss the time to prepare policies for small business owners."

■ Broadcast: YTN Radio FM 94.5 (09:00-10:00)
■ Host: Reporter Cho Tae-hyun
■ Air date: December 17, 2024 (Tuesday)
■ Talk: Ryu Pil-seon, expert member of the Federation of Small Businesses

* The text below may differ from the actual broadcast content, so please check the broadcast for more accurate information.

◆ Reporter Cho Tae-hyun (hereinafter referred to as Cho Tae-hyun): Small business owners and self-employed people have been covered on our broadcast several times. We're going through a very difficult time, but it's even worse. It is said that even though they couldn't get out of the aftermath of COVID-19, high interest rates, and sluggish domestic demand, martial law and impeachment broke out, and they were directly hit. Let's hear firsthand about the current situation. Let's take a look at the alternatives. I'll call Ryu Pil-sun, an expert member of the Korea Federation of Small Businesses. Is the commissioner out?

◇ Ryu Pil-sun, expert member of the Federation of Small Businesses (hereinafter, Ryu Pil-sun): Yes, it is.

◆ Cho Tae-hyun: Yes, how are you, committee member? I said hello, but I also think that the phrase "hello" doesn't go well with me. I heard that there are a lot of complaining calls from the association, so what's the situation like?

◇ Ryu Pil-sun: There are many central and local organizations of the Federation of Small Businesses. I'm getting a lot of calls saying it's too hard. There were many opinions that it was already difficult, but people were also cut off after the martial law.

◆ Cho Tae-hyun: Okay. When I go out in front of my house, I can definitely feel the lack of vitality in the shopping mall than before, but it is known that there are many small business owners and self-employed people who have been directly hit economically, have you done your own research?

◇ Ryu Pil-sun: Our Federation of Small Business conducted an online survey of 1,630 small business owners and ordinary small business owners nationwide for three days from December 10th to December 12th. Among them, 88.4% said their sales fell for about a week after the emergency martial law crisis. And in a similar trend, 89.2% responded that the number of visiting customers decreased. The total sales decline was 44.5% between 1 million won and 3 million won, 29.1% between 3 million won and 5 million won, and 15% of those who suffered sales damage between 5 million won and 10 million won. It can be seen that there was a significant loss of sales in a short period of time as customers stopped visiting in a word.

◆ Cho Tae-hyun: Then, we can only say that we have been directly hit by the declaration of martial law, what are the specific cases of damage?

◇ Ryu Pil-sun: First of all, if we do some research on the responses, there were a series of cancellations during the first week since December 3rd, so the food and beverage industry was hit hard. Many of the people who responded to the survey lost their customers. There were a lot of cancellations. The accommodation industry is the place to pay attention to. In the lodging industry, 54.4% responded that there was a decrease in sales of more than 1%. Ahead of the end of the year, travel destinations and tourist pensions, especially foreign tourism, have decreased at once, which seems to have caused more damage than other industries.

◆ Cho Tae-hyun: Oh, so you don't eat out, you don't travel, the number of tourists is decreasing, you know. It can be said that this situation has struck, but in fact, the end of the year is special at the end of the year, and small business sales are concentrated in December. What's the real share of sales in December?

◇ Ryu Pil-sun: There are many small business owners who usually do business for a month at the end of the year and last until January, February, and March next year, which are relatively off-season. There were a lot of opinions that they blew that line. So, this situation felt even greater for small business owners and self-employed people. In addition to this gathering and tourism, there are special gifts and year-end treatments in the wholesale and retail business. Overall, political confusion has led to a contraction in consumption.

◆ Cho Tae-hyun: There's political chaos, and I don't think there are actually many people who are going to be active in spending. Still, after the impeachment bill was passed, some uncertainty was resolved. Politicians are also asking us to reschedule the year-end party, so wouldn't it get a little better? Don't you have this kind of expectation?

◇ Ryu Pil-sun: Our association also made a comment on Sunday and appealed to the people to find a small business store that brightens up the street and fill it up. And the chairman of the National Assembly also asked for the resumption of year-end meetings. Government ministries and political parties can also say that if you resume meetings and promote consumption in order to revive the economy, it will be a great help in the field. After the National Assembly's decision last Saturday, we haven't felt that anything has changed yet. In a way, small business owners suffered from this emergency martial law, it seems that it takes some time to calm down because it is a psychological and psychological state of the nation.

◆ Cho Tae-hyun: It looks like we need a little more time. Conserving consumption is not necessarily a virtue in a capitalist society. I'll try to make dinner plans first. I think we should compare it with past cases. In 2016, when former President Park Geun Hye was impeached, there was an atmosphere that was very difficult. How is it compared to now?

◇ Ryu Pil-sun: There was a considerable amount of time from the beginning of things to impeachment. That's why many people, including self-employed people, were preparing to some extent. Didn't anyone predict that this was martial law? I can tell you that the whole nation closed their wallets almost at once because there is something that many people were surprised about. In fact, the Small Business Market Promotion Corporation investigates the economic trends of small business owners. In October 2016, the economic trend felt was 76.6%, but there was a case of a 12.1% plunge in that month. The current economic index is now 62.4% in November. The December index hasn't come out yet.There is also a prediction that Ma will probably fall even further than this.

◆ Cho Tae-hyun: Is this a 100% threshold?

◇ Ryu Pil-seon: Yes, it's 100%.

◆ Cho Tae-hyun: Then, in a very bad situation, martial law issuance has dealt a direct blow to the domestic economy. Considering this, there is a possibility that it will fall further in December, right?

◇ Ryu Pil-sun: Yes, that's what I think.

◆ Cho Tae-hyun: Okay. There is a really worrisome situation, and some say that the closing rate is higher than that of opening a business. What is the actual situation?

◇ Ryu Pil-sun: The closing rate went up to 980,000 last year, approaching the era of 1 million closing, and there are a lot of expectations that this year will be worse than that. Overall, there are many situations that are more difficult now.

◆ Cho Tae-hyun: If the situation is like that this year, next year's situation will not be easy, but in the current situation, I feel that the government's support and policy are very urgent. The economic team is said to be operating normally, but I think there are enough concerns. What are you worried about?

◇ Ryu Pil-sun: The problem now is in the Trump 2.0 era. Until now, Korea's exports have been recovering, but the possibility of a reversal is increasing, so many experts seem to predict. And the exchange rate is also a problem. In early October, the won-dollar exchange rate was about 1,325 won, but today, it's 1,437 won.

◆ Cho Tae-hyun: That's right.

◇ Ryu Pil-sun: It's already gone up 110 won in two months. Wouldn't general corporate conglomerates now say that they will set up next year's management plan by assuming 1,500 won? Even if the exchange rate rises by 100 won, there is a high possibility that the price of imported goods can rise by more than 110% in addition to this and that. Looking at it now, I think there is a high possibility that import prices will rise by more than 20%. If this happens, import prices generally go up, and now high interest rates, high prices, high exchange rates have suffered from high exchange rates, which are likely to lead to high prices. Labor costs are also a problem. In fact, the minimum wage is 10,30 won per hour next year, but it exceeded 10,000 won for the first time. Even though the economy becomes this difficult, the minimum wage only rises every year. It is time for the structure of determining the minimum wage. Therefore, it is urgent to reorganize the structure that properly reflects the opinions of small business owners, who are direct parties to the minimum wage. When we conduct such a survey on small business owners, when investigating necessary policy measures, easing the financial burden is the first thing to do. Next, it is necessary to consider that there are many opinions on improving the employment structure, including the reorganization of the minimum wage system, as well as the improvement of the high-cost environment, such as energy cost support and fee reduction, which can improve the high-cost structure.

◆ Cho Tae-hyun: In the process of discussing the minimum wage, it is a structure in which the members are divided into public interest committee members, government users, and workers. In this regard, how do you think the system should be improved?

◇ Ryu Pil-sun: Overall, it's decided every year and decided by the Minimum Wage Committee. In particular, various bills are being discussed in the National Assembly. It was also discussed a lot in the 21st National Assembly. For example, discussions at the National Assembly or the current structure will inevitably lead to division of opinions between labor and management, and the public interest committee will actually decide. Now, the parties directly related to the minimum wage are small business owners. Large companies are not paying the minimum wage. A structure in which the voices of small business owners can be directly reflected in those areas, and a separate application that applies the minimum wage for small businesses and the minimum wage for general companies, which we have been talking about, should be introduced.

◆ Cho Tae-hyun: Okay. There are many points that need to be repaired in various ways, but the problem is that there is no government leadership right now, so I'm a little concerned that these parts will be postponed. Even before the martial law crisis, there are bills on measures for small business owners that the government promoted. What kind of legislation were you desperate for?

◇ Ryu Pil-sun: Representatively, there was a comprehensive measure for small business owners and self-employed on 7.3. What came out at that time was a set of three types of financial support for small business owners. However, if these parts were previously said to have been completed only once before, on December 5, the 7.3 countermeasures were supplemented jointly by the pan-economic ministries. However, these parts are advanced. It can be seen as a big part. And among these parts, the Federation of Small Businesses is a legal economic organization, and it is a structure that reflects the opinions of small business owners, including the Federation of Small Businesses. There was an event to promote the consumption of small business owners' products, which is now being held as a companion festival, following this support policy and response to the four major damages such as the no-show at the people's livelihood forum. Now, small business owners were looking forward to the end of the year due to these various events. However, there is a part where consumer sentiment has shrunk at once, and I hope that this part will not be missed and be revived quickly now. Because small business owners are all connected in a way. But if one place collapses like dominoes, all of them will spread. But wouldn't it be hard to live like this when a domino falls down? I can tell you that we need to mobilize all available means in advance before it spreads.

◆ Cho Tae-hyun: Is there any discussion with the political community regarding this?

◇ Ryu Pil-sun: We've talked about a lot of options. We're continuing to discuss.Ma will be passed on Saturday of the National Assembly, right? Things have changed a bit, so we'll have a general discussion.From what I see now, Ma can be seen as saying, "Now we have to mobilize all available means." Because of COVID-19, small business owners and self-employed people have weakened their basic physical strength. Because there are statistics, but it's doubled. Debt has doubled compared to before Corona, but due to debt, debt has been holding out now. In this regard, it can be seen that financial debt relief is the most necessary.

◆ Cho Tae-hyun: Financial debt relief comes first.

◇ Ryu Pil-sun: Yes, the repayment period is about 5 years now, and there are many people who want to extend it to more than 10 years and then get a loan. By further easing the credit score criteria, they should not only go to the second financial sector, but also get a normal loan from the first financial sector so that they can look forward to hope and live. I haven't been doing business properly for three years now. In the meantime, I was going through the phenomenon, but it's so difficult right now because I'm going through these situations. We're getting a lot of these calls right now.

◆ Cho Tae-hyun: In a way, I can feel desperately that the expert committee member is telling me with a feeling of vomiting blood. I don't think the answer from the National Assembly is clear yet. What do you think?

◇ Ryu Pil-sun: So far, so far, it's that kind of situation, but as far as I can see, a lot of people right now. Regardless of the advantages and disadvantages of any particular party now, people's livelihoods are more important than anything else, rather than approaching each party's partisan interests. Small business owners say it would be nice to show the bipartisan cooperation between the economy and people's livelihoods. We need to review each other's good pledges and come up with all the policies now to overcome the current crisis with the wisdom of not only small business owners but also all ruling and opposition parties and economic players.

◆ Cho Tae-hyun: Okay. The person who left a comment on our YouTube channel said, "I'm a small business owner, too. It's so painful that I feel like people are dying at times like this. ’ There's a comment like that. It's a very difficult thing to say. Lastly, what would you like to say to your listeners on behalf of these people?

◇ Ryu Pil-sun: Many small business owners opened their stores even during martial law. Bosses are more afraid of falling sales than in the military. I want you to know how I feel. I think both the political community and our people should work together to pull out this economic uncertainty. I hope the people will visit small business stores at the end of the year and New Year's holidays and start consumption activities normally. Please resume the canceled meetings, meet your loved ones, and purchase gifts.

◆ Cho Tae-hyun: Okay. Small business owners and self-employed people are the roots of the domestic economy. No matter how confusing the political situation is, as the expert committee member said, discussions for the people's livelihood should continue. So far, I've been with Ryu Pil-sun, an expert member of the Small Business Association. Thank you for talking today.

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