A powerful new law designed to dramatically change the way business is done in Korea through customary entertaining and gift exchanges has taken a heavy toll on the workforce in the dining and drinking industry. As many as 30,000 fewer jobs were available in the sector compared with a year-ago period as lackluster consumer spending amid prolonged economic slump was further dampened by the new regulation that curbed expenses of not only public service and institution workers, but journalists and teachers in both private and public schools as well as their spouses starting Sept. 28.

According to data released by the Ministry of Employment and Labor on Sunday, the number of staff at the nation’s food service industry stood at 930,879 in October, 30,067 fewer than 960,946 in the same month last year. It was the biggest loss since the aftermath of the 2008-2009 global financial crisis.

The number of restaurant jobs had started to decline last year ending upward momentum between 2011 and 2014 due to the unprecedentedly lengthy economic slowdown. The downward pace accelerated in October after the anti-graft law dubbed as Kim Young-ran law named after the former anti-corruption commission chief who first proposed the bill in 2012 went into effect. The act bans public servants, journalists and teachers from being treated with a meal costing more than 30,000 won ($25.5).

“The anti-corruption act served as a damper to jobs in the dining and drinking industry at a time when business had been very slow,” said Sung Jae-min, director of labor trend analysis office in the Korea Labor Institute.

According to a survey conducted by the Korean Food Industry Research Institute last month, 68.5 percent of restaurant business owners said their revenue had dropped on average of 36.4 percent since the law had been enacted. The survey also found that 86.2 percent of restaurants whose average per-customer bill falls between 30,000 and 50,000 won suffered drop in revenue, and 83.3 percent of restaurants where a meal costs 50,000 won or more also complained of poorer business.

By Seo Dong-cheol and Kim Se-woong

[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]