COVID-19 Hits Small Businesses Hard... 90,000 More 'Nahollo Sajangnim' Alone Owners Increased

On the 28th, as confirmed cases of the novel coronavirus infection (COVID-19) increased and strict social distancing measures continued, the restaurant street in Jongno 2-ga, Seoul, showed a quiet scene, reflecting the deepening difficulties faced by self-employed business owners. Photo by Kang Jin-hyung aymsdream@

[Sejong=Asia Economy Reporter Kim Hyun-jung] Due to the COVID-19 pandemic, sales have plummeted, leading to an increase in 'solo business owners' who either lay off employees or start businesses alone. The number of business closures has also risen, causing the number of self-employed individuals to shrink more than during the IMF financial crisis.

According to the 'December 2020 and Annual Employment Trends' recently released by Statistics Korea, the number of self-employed people working alone without employees increased by 90,000 compared to the previous year. This is the largest increase in 19 years since 2001 (102,000). This refers to those who started operating alone without employees or those who dismissed employees and ended up working alone.

There were also a significant number of self-employed people who went through the process of closing their businesses. Last year, the number of self-employed people decreased by 75,000 from the previous year to 5,531,000, the lowest in 26 years since 1994 (5,377,000). In terms of the extent of the decrease, it was the largest drop in five years since 2015 (-98,000).

The number of self-employed people with employees decreased by 165,000. This is the largest decline in 22 years since the IMF financial crisis when it dropped by 247,000. The number of self-employed people with employees has decreased for 25 consecutive months since December 2018 (-26,000).

Looking at the industries, sectors with a high concentration of self-employed people were severely affected. Last year, the number of employees in wholesale, retail, accommodation, and food service industries was 5,647,000, down 319,000 from the previous year. During the same period, wholesale and retail trade decreased by 160,000, and accommodation and food services decreased by 159,000. By occupation, the number of service workers decreased by 69,000 last year, marking the first decline since statistics began.

Meanwhile, the government plans to provide up to 3 million won in the third round of disaster relief funds, covering up to 90%, to small business owners whose sales have sharply declined before the Lunar New Year to support the self-employed.

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