For the past seven months, Korea's monthly trade surplus has been about $50 billion.
GDP has grown about 3% this year. Seoul is one of the most expensive cities to live in.
Yet, according to most Korean media, the economy is in shambles due to the increase in minimum wage to about $7 an hour.
The economy for small mom and pop restaurants and stores is bad, with many closing. However, this was the trend before increasing the minimum wage. The problem lies with high rents, high credit card transaction fees and very unfavorable franchise contracts (many would be illegal in the US). Also money does not flow downward into the local economy from the major corporations that export. They are not hiring, not investing and not paying their fair share of taxes. They are not even paying full price for electricity. Just hording money and buying real estate.
Property taxes are appraised according to the official value of the property which is a about 60% or less of the actual value and the rate is probably under 1%. So, in effect, rich property owners pay less than 0.6 percent. Rent is not even properly taxed. There is a tax brake if you report rental income. That's why the rich all have property, and why they hate property tax increases.
Something is not right in Korea.
At least, some are now seeing justice. During the past conservative administrations, Korean courts ruled against labor unions and laborers. Under the present progressive administration, a few are finally seeing justice.
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And to combat high credit card transaction fees, many mobile transaction services have appeared.
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There is legislation pending to extend the protection period for renters, so that landlords cannot raise rents exorbitantly, to ten years. There were cases where landlords would raise rents by 1000% or more, after the present protection period of 5 years was over.
I know many landlords who run businesses directly in their buildings, because there are no renters. Since they own the building, it is profitable for them to run businesses. For renters, the rent is so high, they cannot make any profit.
