"6 out of 10 Special Employment Workers Oppose Mandatory Uniform Application of Employment Insurance"

Concerns Over Job Losses Due to Deteriorating Business Environment

[Asia Economy Reporter Dongwoo Lee] Six out of ten special-type workers (teukgo) do not want mandatory application of employment insurance. Although the Ministry of Employment and Labor is promoting the legislation of the Employment Insurance Act amendment to strengthen the employment safety net for them, special-type workers themselves oppose it, fearing a decrease in jobs.

The Korea Economic Research Institute commissioned the polling agency Mono Research to survey 234 special-type workers engaged in four occupations (insurance planners, home appliance installation technicians, delivery drivers, and golf course caddies) regarding their opinions on the discussion of applying employment insurance to teukgo. On the 8th, it was revealed that 62.8% of them opposed the blanket mandatory application of employment insurance.

Among them, 68.4% responded that mandatory enrollment in employment insurance could threaten their jobs due to increased burdens on employers. By occupation, concerns about job reduction were highest among golf course caddies (74.1%), delivery drivers (70.0%), insurance planners (66.7%), and home appliance installation technicians (63.6%), in that order.

The main reason for expecting job reduction due to mandatory employment insurance application was increased employer burden (41.3%), followed by deterioration of business environment due to passing employment insurance costs onto consumer prices (23.5%), and promotion of unmanned and automated systems (19.0%).

The Korea Economic Research Institute pointed out that to minimize side effects where increased labor costs from employment insurance lead to direct or indirect employment adjustment pressures, the insurance premium burden on teukgo should be raised higher than the government’s legislative proposal.

Income reporting for calculating employment insurance premiums is also a burden for teukgo. The government’s legislative notice requires employers to report the income paid to teukgo to the Korea Workers’ Compensation and Welfare Service for premium calculation. The survey showed that 64.1% had negative responses, citing that income reporting could lead to application of other social insurances and thus increase costs (46.6%), and discomfort with income exposure itself (17.5%). Meanwhile, 32.5% responded that it was not a problem as they already report income.

Teukgo tend to have frequent voluntary job changes and can adjust their income themselves. Among teukgo who had experience of job change or resignation, only 3.2% reported unilateral contract termination due to business closure, bankruptcy, or worsening management.

On the other hand, 94.7% of voluntary job changes or resignations were due to reasons such as changing jobs or careers for higher pay (37.9%), personal reasons like marriage, childbirth, or health (30.5%), and dissatisfaction with working conditions such as working hours or promotion (26.3%). Additionally, 63.6% of all surveyed teukgo responded that they can adjust their workload as needed, which causes income fluctuations.

The Korea Economic Research Institute argued, "Since teukgo have different characteristics from wage workers in terms of job changes and income adjustment, it is necessary to separate the accounts for workers and unemployment benefits considering these differences." The government’s legislative notice includes recognizing job changes due to income reduction as qualifying for unemployment benefits. However, given teukgo’s characteristics of being able to adjust income through contract counts, installation counts, delivery volumes, or rounding frequency, moral hazard may occur where income is reduced to receive unemployment benefits. Therefore, it emphasized the need to strictly limit eligibility for unemployment benefits.

Choo Kwang-ho, Head of Economic Policy at the Korea Economic Research Institute, said, "Just as the high minimum wage increase caused a decrease in employment among vulnerable groups, mandatory application of employment insurance for teukgo could cause side effects that reduce their jobs. Especially in the severe business difficulties caused by the novel coronavirus infection (COVID-19), such discussions will only impose burdens on both employers and teukgo."

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