6.61 Million Self-Employed in August... Decrease of 29,000

Statistics Korea August 'Supplementary Survey on Non-Wage Workers and Non-Economically Active Population' Results
Main Reason for Closing Business, 52% "No Prospects or Business Slump"
Lack of Preparation Period for New Self-Employed... 49.9% "1-3 Months"

[Sejong=Asia Economy Reporter Moon Chaeseok] The number of non-wage workers, including self-employed individuals, stood at 6.61 million in August, down by 29,000 compared to the same month last year. This is attributed to an increase in self-employed people giving up their businesses following the COVID-19 pandemic. The number of self-employed with employees dropped to the lowest in 31 years, while 'solo bosses'?self-employed without the capacity to hire even one employee?increased to the highest in 7 years. The government explains that this is the result of multiple factors, including economic downturns caused by minimum wage hikes and sluggish domestic demand due to the COVID-19 spread, as well as workforce restructuring driven by the activation of non-face-to-face and platform industries.

On the 4th, Statistics Korea announced the 'Results of the August 2021 Supplementary Survey on Non-Wage Workers and Non-Economically Active Population in the Economically Active Population Survey.' Non-wage workers refer to self-employed individuals with employees, self-employed without employees, and unpaid family workers assisting family businesses.

By type, the number of self-employed with employees was 1.301 million, down 61,000 from the previous year. This was the lowest since August 1990, when it was 1.193 million, marking the lowest in 31 years. However, the decrease was significantly smaller than last year's drop of 172,000. Conversely, the number of self-employed without employees, so-called 'solo bosses,' increased by 56,000 to 4.249 million, the highest since August 2014, when it was 4.259 million. This is interpreted as bosses with employees laying off staff due to business difficulties amid the economic downturn, thus becoming 'solo bosses,' or completely closing their businesses. By age group, non-wage workers decreased among those in their 50s (-72,000) and 40s (-47,000), while those aged 60 and over increased by 120,000.

However, some perspectives argue that this result cannot be attributed solely to the economic downturn. It is also believed that self-employed individuals have shifted from face-to-face service industries such as restaurants to platform companies. The average duration of operation (affiliation) by industry for non-wage workers was 14 years and 10 months overall, two months longer than last year. Among the seven surveyed industries, only face-to-face service industries recorded a decrease in tenure, dropping by seven months to 11 years and 9 months. A Statistics Korea official explained, "We can confirm through data that industrial structural changes are occurring as online and non-face-to-face trends expand," adding, "While there are various interpretations for the decrease in self-employed with employees and increase in those without, it is clear that the number and tenure of non-wage workers in face-to-face service industries are showing a downward trend."

Bosses with employees also viewed the current situation more negatively than solo bosses. Among self-employed with employees, 85.6% responded that they plan to "continue maintaining" their current business, which is lower than the 88.3% of self-employed without employees. The main reason for intending to quit the current business was "lack of prospects or business slump" (52.0%), followed by personal reasons (27.9%) and switching to a better industry (11.8%).

While 'senior self-employed' face tough conditions, the preparation period for 'new self-employed' was found to be unreasonably short. Among self-employed who started their business within the past year, 49.9% had a preparation period of just 1 to 3 months, nearly half.

They also did not accumulate much seed money. Those who answered that their initial business capital was less than 50 million KRW accounted for 73.7% of the total. Among self-employed who started within the past year, 19.5% had no prior job experience.

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