Earnings of the Self-Employed Tank

Earnings of self-employed businesspeople fell more than 40 percent in 2020 due to the devastating effects of lockdown.

According to a joint study by Statistics Korea and the Ministry of SMEs and Start-ups, the self-employed posted an average operating profit of just W19 million last year, down 43.1 percent from W33 million in 2019 (US$1=W1,190).

Their average profit boiled down to W2.75 million a month in 2019, but that fell to W1.58 million a month in 2020, which is less than the monthly income of W1.80 million on the minimum wage.

The drop was caused by labor costs, rent and ingredients prices remaining the same even as customers were shut out.

Their average annual sales also fell 4.5 percent to W224 million. Circumstances are expected to be even worse this year.

The number of self-employed business owners stood at 2.9 million last year, up 131,000 from a year ago. But the number of workers they employed dropped by 871,000 to 5.57 million as more owners laid off staff due to lockdown and the minimum wage hike.