[The Work Revolution] COVID-19 as a Catalyst for Polarization... 'My Job' Has Disappeared

Women, Low-Educated, Temporary Workers Hit First
COVID-19 Cuts Weak Links First, Worsening Polarization

[Sejong=Asia Economy Reporters Kim Hyun-jung and Lee Hyun-joo] Kim Mo (53 years old, male), who runs a coffee shop in Jongno-gu, Seoul, fired a part-time employee who worked in the morning in early last month. This decision was made because customers learned to use the unmanned terminal (kiosk) order system installed in front of the store faster than expected, and sales outside of commuting and lunch hours declined due to reduced foot traffic. The store, which used to be open from 7 a.m. to 6 p.m., now closes before 3 p.m. This decision was made considering the burden of labor costs, the unexpectedly useful unmanned terminal, and above all, the decreased sales after the COVID-19 pandemic.

Oh Mo (38 years old, female), a contract worker at a health food corner in a duty-free shop in Seoul, has been on leave for two months after receiving a contract termination notice from the company at the end of April. The number of Chinese tourists, which had recovered to normal levels until early this year, shrank to 1% of last year's level due to the COVID-19 crisis, leading the duty-free shop to adjust its workforce. She has looked for other sales jobs but has found it difficult to find openings.

South Korea's 'job market' is undergoing turmoil. The unexpected variable of COVID-19, which has lingered for five months, followed the accelerated minimum wage increase and retirement age extension under the Moon Jae-in administration. Private companies are postponing or drastically reducing hiring, and self-employed individuals are choosing to be 'solo bosses.' Above all, COVID-19 has targeted and cut off relatively vulnerable links such as women, service workers, and those with low education levels. Various employment indicators that policies and society had been slowly improving were instantly shattered by COVID-19.

◆ Decline in Female Employment Growth for the First Time in 122 Months = According to Statistics Korea on the 17th, from March this year when the impact of COVID-19 began to be fully reflected in the job market until the most recent statistics in May, the number of employed women decreased sharply by 647,000 compared to the same period last year. In terms of time series, the increase in female employment, which had continued for over 10 years, was interrupted for the first time in 122 months. The scale of the decrease is also significant. The number of newly employed women decreased by 293,000 in April and 239,000 in May, which did not occur even during the global financial crisis in 2008. At that time, the decrease was about 100,000 per month on average. The previous largest decrease based on April and May was in 1998, 22 years ago (662,000 in April, 639,000 in May).

Of course, the number of employed men also decreased during the same period. From March to May this year, the number of employed men decreased by 417,000 over three months. However, considering the total number of employed men is 15,382,000 and women 11,549,000, it is clear that COVID-19 took more jobs from women.

The COVID-19 impact varies significantly by education level. From March to May, the total number of employed people in Korea decreased by 1,063,000, but university graduates, representing four-year college graduates, actually increased employment by 197,000 compared to the previous year during this period. High school graduates, whose employment size is similar to university graduates at around 10 million, decreased by 698,000 during this period. Similarly, clear decreases were observed among those with elementary school or less and middle school education levels.

Looking at employment by occupational status, temporary workers were the most affected by the spread of COVID-19. Temporary workers are those with employment periods longer than one year but contracts shorter than one year or initially hired as temporary workers, representing 'unstable jobs.' From March to May, the number of temporary workers decreased by 1,488,000 compared to the previous year.

A kiosk-installed unmanned store located in Dodam-dong, Sejong Special Self-Governing City. Prices are separately displayed on all products, and customers select items themselves and pay through the kiosk. This store, equipped with CCTV cameras installed throughout, does not have a single staff member on site. (Photo by Kim Hyunjung alphag@)

◆ Solo Bosses Are the Trend = One employment group that has shown a noticeable trend in employment statistics since the COVID-19 crisis is the self-employed without employees, so-called 'solo bosses,' who have been increasing by more than 100,000 every month as before the crisis. In March, the number increased by 124,000; in April, by 107,000; and in May, by 118,000. This number includes both those who started a business alone and those like Kim from the Jongno coffee shop who fired existing employees. As of May, solo bosses number 4,217,000, the highest in seven years since May 2013 (4,228,000).

On the other hand, self-employed with employees decreased by 195,000 in March, 179,000 in April, and 200,000 in May compared to last year. The May figure is the largest decrease in 21 years and 5 months since December 1998, when it dropped by 281,000. Excluding cases of partial closures after running a business with employees, it is presumed that many self-employed people dismissed employees and started working alone. The simultaneous increase in solo bosses and sharp decrease in temporary workers during the same period supports this.

The increase in solo bosses, which was inevitable amid simultaneous sales declines and rising labor costs, is likely to accelerate further with the widespread adoption of kiosks. In fact, the use of kiosks has noticeably increased recently not only in large franchise fast-food chains like McDonald's and Lotteria but also in small neighborhood restaurants, coffee shops, and marts. This trend is welcomed by business owners not only for cost reduction but also for minimizing errors in order content and sequence input. There are even unmanned stores without any staff visible in various parts of the city.

Regarding this, Seong Jae-min, a research fellow at the Korea Labor Institute, diagnosed, "Non-face-to-face services may worsen low-wage jobs that can be replaced by technology due to COVID-19." Gu Jeong-woo, a professor of sociology at Sungkyunkwan University, predicted, "Economic disparities will widen further due to changes in the job market caused by COVID-19," adding, "Relatively vulnerable groups in employment forms such as daily workers, service workers, and women are more likely to be negatively affected."