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Number of self-employed people plunges amid deepening pandemicBy Choi Jae-hee
Published : Sept. 8, 2020 - 15:29
The coronavirus pandemic has hit small businesses in South Korea. The number of self-employed people decreased at an alarming rate in July compared with a year earlier, data showed Tuesday.
According to data compiled by the Korea Small Business Institute and Statistics Korea, the country had 5.548 million self-employed people registered as of last month, down 127,000 from the previous year. The sharp on-year drop was nearly five times as steep as in July last year, when the number of self-employed businesspeople posted a decline of 26,000 from a year earlier.
While the number of self-employed people with employees dropped off by 175,000 on-year to 1.345 million in the same period, those without employees increased in number by 48,000, inching up to 4.203 million.
The figures indicate that a large number of small merchants have had to lay off their staff to reduce operating expenses, officials explained.
Local small-business operators have seen a sharp decline in overall sales.
A recent survey conducted by the Korea Federation of Micro Enterprise showed that nearly 60 percent of the 3,415 local small-business owners surveyed said sales had shrunk by more than 90 percent. More than 50 percent said they would consider business closure.
The situation is set to worsen as the government earlier extended Level 2.5 distancing measures through this weekend to bring the second wave of COVID-19 infections under control. Quarantine rules had already been in place nationwide, shutting down 12 types of high-risk businesses such as nightclubs and karaoke rooms and slashing hours of operation at cafes, restaurants and bars in the Seoul metropolitan area.
Experts call for the swift provision of additional emergency grants for small businesses and the self-employed.
“Speedy cash grants are crucial in terms of helping small businesses make ends meet amid the current disastrous situation,” said Noh Min-sun, a researcher at the Korea Small Business Institute. “If requirements for relief grant applications are too complex, the cash relief will not be spent on the people most affected by the pandemic.”
On Sunday, the government, ruling party and presidential office pledged to implement a tailored disaster relief subsidy program with a focus on the vulnerable, who include the unemployed, young people, freelancers, low-income people, merchants and the self-employed. Detailed plans for the extra cash relief, including how the beneficiaries will be decided, will be announced as early as this week, according to the Ministry of Economy and Finance.
By Choi Jae-hee (email@example.com)
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Address by President Yoon Suk Yeol on the 105th March 1st Independence Movement Day