February 22, 2016 12:44
The number of self-employed people fell in 2015 to levels last seen 20 years ago.
According to Statistics Korea, the number of self-employed people stood at 5.56 million last year, a plunge of 89,000 compared to 2014. It was the biggest annual decline in five years and the fewest since 5.38 million in 1994.
The number of self-employed Koreans peaked at 6.19 million in 2002, but has been declining ever since.
Last year, the number of one-man businesses fell by 120,000 to 3.98 million, though self-employed businesses with some staff on their payroll grew by 31,000.
The ratio of the self-employed to all businesses stood at 27.4 percent as of 2013. The OECD average is around 16 percent.
Among the 31 member nations of the OECD, only Greece (36.9 percent), Turkey (35.9 percent) and Mexico (33 percent) have a higher proportion of people working for themselves than Korea.
Also, around 60 percent of the self-employed in Korea are over 50, while 90 percent employ less than five people. The self-employed are usually people who set up a small business after retiring from office jobs, but now there are far too many of them and the competition causes scores of them to shut down.
According to the Korea Small Business Institute, four out of 10 venture companies across the nation close down less than a year after opening. Only 30.9 percent of them stay open for more than five years.
The average operating profit at the time of closure was W1.12 a month, less than the minimum wage of W1.17 million (US$1=W1,235).
Only one out of three self-employed people who shut down their business due to scorching competition found full-time work, while the others ended up jobless (35.6 percent) or eking out a living as temps (28.9 percent).
An official at the Ministry of Strategy and Finance said, "The number of self-employed people is decreasing rapidly due to oversupply and is also plunging in rural communities."
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