The Bank of Korea: "Self-Employed with Employees Decreased by 11% Compared to Pre-COVID"

Courier and Platform Worker Increase Has Minimal Impact on Self-Employed Without Employees

[Asia Economy Reporter Kim Eunbyeol] Amid over a year of sluggish employment in self-employment due to the COVID-19 pandemic, self-employed individuals with employees have experienced a significant shock, decreasing by more than 10% compared to before COVID-19. This is the result of active restructuring due to difficulties in bearing fixed costs such as labor costs and rent, resembling the situation during the foreign exchange crisis. However, self-employed individuals without employees have remained stable or even slightly increased, driven by growth in delivery and platform workers.

According to the "Employment Status and Evaluation by Characteristics of Self-Employment after COVID-19" released by the Bank of Korea on the 7th, self-employed individuals without employees were minimally affected by COVID-19, whereas those with employees have continued to experience a sharp decline.

Self-employed individuals with employees decreased by up to approximately 11% compared to February 2020, before the COVID-19 outbreak. This is attributed to the high proportion of fixed costs such as labor and rental fees, which caused a significant impact during the uncertain pandemic-induced economic recession.

On the other hand, the impact on self-employed individuals without employees was minimal. The Bank of Korea cited the increase in delivery and courier demand after COVID-19 as the cause for the rise in courier drivers and platform delivery riders.

Looking at industries, the number of self-employed individuals engaged in transportation and warehousing increased significantly due to the surge in delivery and courier demand. When setting February of last year as 100, the number of self-employed in face-to-face service industries such as wholesale and retail (95.58), accommodation and food services (100), personal services (98.64), and education (85.93) decreased, whereas transportation and warehousing rose sharply to 108.93. This is the result of a significant increase in courier drivers and platform delivery riders classified as self-employed.

Oh Sam-il, Deputy Head of the Employment Analysis Team at the Bank of Korea’s Research Department, said, "Traditional self-employed individuals, such as those in face-to-face service industries and those with employees, will continue to experience negative impacts for a considerable period due to the nature of traditional self-employment." He added, "From a policy perspective, it is necessary to explore ways to induce these individuals to reallocate employment into more productive industries."

The Bank of Korea analyzed that the number of self-employed individuals without employees is inevitably expected to increase further. With the spread of digitalization and the rise of the platform economy, the trend of increasing self-employed without employees is unavoidable. However, Deputy Head Oh added, "It should be noted that those who involuntarily entered due to this economic recession and platform workers may have unstable employment conditions because their job security is not high."

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