Self-employed business owners suffered a major setback last year, with half of all sectors posting revenue drops from the previous year totaling 19.4 trillion won ($17.42 billion), new data revealed Tuesday.
According to data from the National Tax Service obtained by Rep. Choo Kyung-ho of the main opposition People Power Party, 29 out of 52 categories of self-employed business owners saw their revenue drop last year, with restaurateurs suffering the biggest loss as they saw 5.73 trillion evaporate.
“The government and both the ruling and opposition parties must actively come up with measures to help small self-employed business owners who were affected by the state social distancing rules, such as passing the damage compensation bill,” said Choo.
The wholesale and commodity brokerage sector suffered a revenue drop of 4.39 trillion won, and the automobile retail sector saw a year-on-year revenue loss of 2.74 trillion won. The overall retail sector and the property industry bucked the trend, however, posting revenue increases of 4.12 trillion won and 1.56 trillion won, respectively.
Though the figure alone paints a grim picture of South Korea’s economic situation since the pandemic began last year, issues like rent get overlooked, said Lee Sung-won, the head of the Korean Federation of Self-Employment and Micro Enterprise.
“In my view, the bigger problems are not reflected in these figures. Business owners who want to close their businesses because revenue has drastically dropped or they cannot fully operate are being forced to continue because of the lease agreement.
“These people have taken out a lot of loans. When they close their business, they have to pay them back all at once. And a lot of businesses are being forced to go on given these circumstances,” Lee said.
“I wonder how long things can continue this way and it feels like we will soon reach a boiling point,” Lee said.
Against this backdrop, the progressive minority Justice Party held a press conference Tuesday and called on the government to pass a bill to provide compensation to businesses affected by the pandemic.
It follows a protest staged Monday by a group of entertainment establishment owners, who took to the streets of Seoul and called on the government to ease the social distancing rules and provide subsidies to compensate for the damage caused by the pandemic.
The bill was initiated by Democratic Party Rep. Song Gap-seok earlier this year and is currently awaiting approval from the National Assembly. If passed, it would revise the Act on the Protection of and Support for Micro Enterprises and pave the way for the government to provide subsidies to businesses affected by social distancing rules.
But politicians have faced criticism from business owners over its slow progress.
Lee said the government must come up with multiple measures to help self-employed businesses.
“When businesses continue to pay rent while not being able to operate in the usual way, there will be a problem. With compensation likely to go straight to paying rent, there should be not one but multiple measures to alleviate the situation,” he said.
By Yim Hyun-su (email@example.com