"Can't Endure Anymore"... 'Nahollo Sajangnim' Decreases for 12 Consecutive Months

The so-called 'solo owners,' who run their businesses without any employees, have decreased for 12 consecutive months. This decline is due not to solo self-employed individuals hiring employees and thus no longer being solo, but rather due to business closures. This is the first time such a trend has occurred in over five years.

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On the 18th, Statistics Korea announced that the number of self-employed individuals without employees was 4,306,000 last month, down 64,000 from the same month last year. This marks a 12-month consecutive decline since September last year. The last time self-employed individuals without employees decreased for 12 consecutive months was from November 2017 to January 2019, a 15-month continuous decline, making this the first occurrence in over five years.

The continuous decrease in solo owners among the self-employed is due to the fact that many businesses have been unable to endure adverse conditions such as high interest rates, labor cost burdens, and sluggish consumption, amid a business environment where sales and operating profits have not properly recovered since the COVID-19 pandemic. Many self-employed individuals who had been sustaining their businesses through loans during the pandemic are now choosing to close their businesses as loan repayment periods arrive amid high interest rates.

Typically, when the economy is good, solo owners tend to hire employees and transition into self-employed individuals with employees, leading to a decrease in solo owners. However, the current interpretation is that more self-employed individuals are choosing to close their businesses. In fact, the amount of Yellow Umbrella insurance payouts for business closures to small business owners has recently shown an increasing trend.

According to data submitted by the Ministry of SMEs and Startups to Assemblyman Heo Jong-sik of the Democratic Party, a member of the National Assembly's Industry, Trade, Energy, Small and Medium Enterprises and Startups Committee, the Yellow Umbrella business closure insurance payouts paid up to July amounted to 888.1 billion KRW, an increase of 12.4% compared to the same period last year. The Yellow Umbrella is a public insurance system designed to stabilize the livelihood and provide retirement security for small business owners. The Yellow Umbrella business closure payouts showed an increasing trend with 614.2 billion KRW in 2019 (pre-COVID-19), 728.3 billion KRW in 2020, 904.0 billion KRW in 2021, and 968.2 billion KRW in 2022. In 2023, the amount surpassed 1 trillion KRW for the first time, reaching 1.026 trillion KRW. The payouts for business closures have continued to rise this year as well.

Assemblyman Heo emphasized, "Although the government has been presenting policies for small business owners and the self-employed one after another this year, they are not resonating on the ground," and added, "The government should more actively promote policies to stimulate consumption to reduce business closures among small business owners and the self-employed."

Meanwhile, the total number of self-employed individuals last month was 5,745,000, down 39,000, marking a seven-month consecutive decline. Additionally, the number of self-employed individuals with employees last month was 1,439,000, up 26,000 from the same month last year, showing a five-month consecutive increase.

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