One in three self-employed in South Korea earn less than minimum wage

A significant portion of South Korea's self-employed population is struggling financially, with one in three earning less than the monthly minimum wage. The average monthly income for these business owners falls below 2.15 million won (approximately $1,600 USD), according to a recent survey.

The survey, conducted by the Korea Economic Research Institute (KERI) on 500 self-employed individuals nationwide, revealed that 57% have experienced a decline in their business conditions this year compared to last year. Conversely, only 8.4% reported improvements, while 34.6% saw no change. The retail and wholesale sectors reported the highest percentage of worsening conditions at 66.3%, followed closely by the accommodation and food service industry at 65.8%.

These financial hardships are pushing many to the brink. A quarter of respondents are actively considering closing their businesses, and 59.2% indicated they have no capacity for additional hiring. The rising cost of goods, exacerbated by global factors like sustained high oil prices due to Middle Eastern conflicts, is significantly increasing operational expenses for self-employed individuals.

In response to these pressures, many businesses are planning to increase prices. KERI's analysis indicates that 37.6% of self-employed individuals are already planning price hikes based on the current minimum wage. Furthermore, 25.6% would consider raising prices if the minimum wage increases by 1-3%, and 16.0% would do so if it rises by 3-6%. The industry is advocating for a freeze on the minimum wage, with 44.6% of self-employed individuals supporting this measure for the upcoming year, particularly within the accommodation and food service sector where support for a freeze reached 56.6%.