Merchants Agitated by 'Social Distancing U-Turn'... Success in Quarantine Depends on 'Compensation for Losses'

Government: "Must suppress spread to overcome critical phase" U-turn on quarantine policy
"Cooperation over" self-employed immediately protest
Fatigue peaks due to prolonged strict quarantine and distancing
Criticism arises over inadequate 'compensation'
"Advance compensation needed this time" political circles urge active support

On the 4th of last month, a rental inquiry notice was posted in the underground shopping mall at Yeongdeungpo Station in Seoul. / Photo by Juhyung Lim skepped@

[Asia Economy Reporter Lim Juhyung] "The government's and quarantine authorities' irresponsibility is being passed on to the self-employed. Cooperation with quarantine measures is over."

This is a statement recently issued by the National Emergency Countermeasures Committee for the Self-Employed (Jadae-wi), criticizing the government's announcement to strengthen quarantine guidelines. As the daily number of COVID-19 confirmed cases reached between 5,000 and 7,000, pushing the healthcare system to its limits, the government is attempting once again to strengthen social distancing measures. However, strong opposition from self-employed individuals and small business owners is expected. Ultimately, there was even a threat saying "cooperation with quarantine is over."

It is pointed out that the prolonged social distancing measures, which have been in place for nearly two years, have worsened the financial hardships of self-employed people, exhausting their patience. To encourage self-employed individuals, who have reached a state of exhaustion due to long-lasting quarantine guidelines, and to get them to cooperate with quarantine policies again, the priority must be proper 'compensation for losses.'

◆Effectively a U-turn to distancing... Immediate backlash from self-employed

On the 16th, Prime Minister Kim Boo-kyum stated at the Central Disaster and Safety Countermeasures Headquarters meeting held at the government Seoul office, "We judged that only by strongly enforcing social distancing can we quickly suppress the spread and overcome the crisis." This effectively means halting the 'gradual recovery to daily life (With Corona)' and making a U-turn back to distancing.

Specific quarantine guidelines include △ limiting private gatherings to a maximum of 4 people regardless of vaccination status in both metropolitan and non-metropolitan areas △ restricting indoor business operating hours △ limiting the number of participants in large-scale events.

Prime Minister Kim Boo-kyum is presiding over the Central Disaster and Safety Countermeasure Headquarters meeting for COVID-19 response at the Government Seoul Office Building on the morning of the 16th. / Photo by Yonhap News

According to the quarantine authorities, as of midnight on that day, the number of new confirmed cases was 7,622. The number of critically ill patients was 989, approaching the 1,000 mark. In particular, the occupancy rate of dedicated severe COVID-19 patient beds in Seoul has already surpassed 90.6%, raising concerns about overheating of the healthcare system. It is a situation where a 'temporary pause' is necessary to reduce the burden on medical institutions immediately.

However, self-employed individuals immediately protested. On the previous day (15th), Jadae-wi issued a statement warning that they would hold a large-scale protest in Gwanghwamun, Seoul, on the 22nd. Jadae-wi sharply criticized, "What efforts has the government made during the long two years?" and "Why is the irresponsibility of the government and quarantine authorities again being passed on to the self-employed?"

They emphasized, "You will clearly see through this protest that our breaking the silence and moving forward again is entirely due to their neglect."

◆Fatigue among small business owners grows due to prolonged high-intensity quarantine policies

As high-intensity quarantine policies due to the COVID-19 pandemic have prolonged, citizens' fatigue has already reached its peak. Among them, opposition from self-employed and small business owners who suffered direct sales losses due to distancing guidelines is inevitably strong.

According to the National Statistical Portal, in the first half of this year, actual sales in the food service and bar industries fell by 7.2% compared to the same period last year, dropping to the lowest level since statistics began in 2010.

With reduced income, self-employed individuals had no choice but to endure through debt. At the end of July, the Bank of Korea announced that the outstanding loans to individual business owners (self-employed) in the banking sector reached approximately 409.7 trillion won, an increase of 10.8% compared to the previous year. Compared to 2019, before the COVID-19 crisis, it surged by a whopping 25.2%, equivalent to a quarter increase.

On the afternoon of the 1st, merchants are waiting for customers at the Noryangjin Fish Market in Dongjak-gu, Seoul, where a COVID-19 cluster infection occurred. / Photo by Yonhap News

Recovery in the self-employed sector was much slower than in other industries. According to the 'November Employment Trends' released by Statistics Korea, the number of employed people in the country last month was 27,795,000, an increase of 553,000 compared to a year ago, continuing vitality in the employment market.

However, the number of employees in accommodation and food services, where self-employed people are mainly concentrated, decreased by 123,000 and 86,000 respectively compared to the previous year. While other industries gradually recovered after the initial damage during the COVID-19 pandemic last year, self-employed individuals still seem trapped in a recession.

The 'With Corona' policy, which started on the 1st of last month, was a 'golden opportunity' for self-employed and small business owners who had suffered severe damage to recover their sales. However, the government reverted to distancing measures again just 46 days after switching the quarantine system. For self-employed individuals, this decision can only be heartbreaking.

◆Criticism that previous compensation was insufficient

Meanwhile, dissatisfaction with the government's 'compensation for losses' is also significant. Earlier, the National Assembly passed the 'Small Business Protection and Support Act Amendment' (Loss Compensation Act), which mandates government compensation and support for small business owners who suffered losses due to business suspension and restrictions. Accordingly, the government prepared 2.4 trillion won in compensation for small business owners through the second supplementary budget and is implementing payments.

However, controversies over detailed regulations on compensation began from the start. For example, there is an issue regarding the period recognized as 'losses due to quarantine guidelines.' According to this law, the retroactive application period is limited to three months from the date of promulgation to the date of enforcement. Losses incurred from past quarantine guidelines are only partially compensated in the form of damage support.

On the 8th, members of the Korea Federation of Self-Employed Sufferers held a protest at the 'Government Ruling Party Condemnation Rally Urging Substantial Compensation for COVID-19 Damages' near the National Assembly in Yeouido, Seoul. / Photo by Yonhap News

Also, the compensation amount is subject to a damage recognition rate, with up to 80% of the amount lost due to distancing being compensated. Self-employed individuals protested, demanding "100% compensation."

Eventually, self-employed people criticized the government's compensation as "peanuts" and even held protests. On the 8th, the 'COVID-19 Victim Self-Employed General Union,' formed by 20 industry groups including food service, entertainment, and academies, held a 'Government and Ruling Party Condemnation Rally Urging Real Compensation for COVID-19 Damage' in front of the Kookmin Bank in Yeouido.

At this event, they strongly criticized, "15% of all self-employed people received only 100,000 won as three months' worth of compensation, which amounts to 33,000 won per month," and "Due to distancing, self-employed people are buried in debt, but the government and ruling party are only giving meager, insufficient compensation and taking credit for it."

◆"Advance compensation and support are necessary" Political circles also urge support for small business owners

In political circles, voices are emerging that 'compensation for losses must come first to seek voluntary cooperation from citizens for quarantine.'

Lee Jae-myung, the Democratic Party presidential candidate, issued an emergency statement on the 14th, saying, "The ones who will suffer the most damage from strengthened distancing measures are small business owners and the self-employed," and "Advance compensation and support for them must be implemented."

This statement implies a paradigm shift to a method of preemptively providing compensation funds, unlike the existing plan of estimating the damage caused by distancing measures and then paying compensation accordingly.

He urged, "I request measures at the National Assembly and government level for proactive compensation and support," and "Special sacrifices must be followed by special compensation."

Lee Jae-myung, the presidential candidate of the Democratic Party of Korea, visited Boramae Medical Center in Dongjak-gu, Seoul, on the afternoon of the 15th to receive a report on the COVID-19 response status from the executives of Boramae Medical Center. / Photo by Yonhap News

Voices from the opposition party also called for active compensation for self-employed damages.

Kim Jong-in, the head of the People Power Party's election campaign committee, said at a National Assembly press conference on the 16th, "The budget allocation has already been completed by the government," but emphasized, "We must urgently compensate self-employed damages by utilizing the government's contingency funds first."

He added, "If it still seems insufficient, I think we need to consider supplementary budgets that this government should implement over the next three months."

The government also plans to focus support on small business owners. Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance, chaired the Emergency Economic Central Countermeasures Headquarters meeting at the government Seoul office that day and explained, "Regarding support for small business owners, we will mobilize all existing budgets, various funds, and contingency funds," and "We will provide multi-layered maximum support including quarantine support funds, expanded compensation for losses, and ultra-low interest loan support."

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