[Initial Insight] The Era of COVID-19 Where Being Kind Means Survival

On the 14th, when social distancing in the Seoul metropolitan area was downgraded from level 2.5 to level 2, office workers in Myeongdong, Seoul, headed to restaurants for lunch. Photo by Moon Honam munonam@

[Sejong=Asia Economy Reporter Kim Hyunjung] The expression 'chakhada (善)' is a comprehensive compliment that leaves nothing to add or subtract. Unlike the English words good or nice, it carries a nuance of being more than standard?upright, kind, and seemingly generous. It is partly innate, a temperament that one rarely loses in the face of most situations, and an aura that allows one to smile through losses with a serene smile. On the other hand, it is difficult to measure or standardize this degree, making it a relative evaluation indicator that cannot be firmly grasped.

These days, as the novel coronavirus disease (COVID-19) has engulfed all social and economic issues, I recalled this elusive yet powerful adjective. Perhaps the greatest virtue in the era of COVID-19 is being 'chakha' (good/kind), I thought. Especially, to benefit from or accept various policies recently introduced by the government without complaint, one must embody this virtue personally or have it in those around them.

Due to the COVID-19 crisis, tourism stopped and foot traffic on the streets decreased, causing small business owners to begin facing threats to their livelihoods. When sales do not occur properly, the biggest blow to small business owners is fixed costs, among which rent is the most significant. However, if they have a 'chakhan imdaein' (good landlord), there is nothing to fear. Even if landlords suffer losses in fact by granting rent reductions under government policies and receiving tax credit benefits for the reduced rent, it is okay because they have a good heart. It does not matter whether the landlord is a 'geumsujeo' (silver spoon) who inherited the building from their parents and lives comfortably from youth or a retiree in their sixties who bought a commercial building with debt hoping for a decent old age. What matters is whether they are 'chakha' or not. Moreover, when COVID-19 resurged last month, the government quickly decided to extend the 50% tax credit for good landlords until the end of the year. For reference, the proportion of self-employed in Korea (as of 2018) is 25.1%, ranking 7th among OECD member countries, four times that of the United States and more than twice that of Japan. To avoid closure in this fierce competition, delicious food, good service, low prices, and contracts with good landlords are becoming essential factors.

The government recently enforced temporary closures or business restrictions on certain stores to resolve the situation early. Business owners had no choice, and violations were subject to complaints by local governments. Considering the unprecedented situation, the government prepared a 4th supplementary budget to provide support funds of 1 to 2 million won to these small business owners. Those who completely closed due to social distancing measures (restricted gathering businesses) receive 2 million won; those with restricted operations (limited gathering businesses) receive 1.5 million won; and small business owners with annual sales under 400 million won receive 1 million won. There is only one other condition: the business type must be socially considered 'chakha' (good). Dance halls, colatecs (Korean-style dance clubs), or entertainment bars with hostesses are excluded. Although these are legal businesses recognized by tax collection and the Food Sanitation Act, it seems there was a judgment that tax support for such pleasure-oriented establishments would be inappropriate.

There is a long-standing expression, 'chakhan sikdang' (good restaurant) or 'chakhan gagaek' (good price). At first glance, it is applause from customers for restaurants that sell very cheap and reasonably tasty food. However, the price structures of such places are mostly similar. They are usually run by solo owners or their families who grow ingredients themselves and reduce costs by sacrificing their own labor. The intention behind calling them 'chakha' is very clear. Regardless of the owner's hard work or the market average price, it is essentially a tacit demand to continue providing goods and services cheaply as they are now. Stripped of all adjectives, it is an utterly ruthless demand.