"Just Enduring It" Social Distancing Eased... Will Self-Employed Businesses Catch a Break? [Reporter Han Goes]

Myeongdong Merchants "Just Enduring... It's the Same Without Customers"
Civilians "Reducing Unnecessary Spending... Important to Maintain an Atmosphere Without Confirmed Cases"

As social distancing measures were eased to Level 1, the streets around Myeongdong in Jung-gu, Seoul, appeared quiet on the afternoon of the 16th. Photo by Seunggon Han hsg@asiae.co.kr.

[Asia Economy Reporter Han Seung-gon] "We just endure every day, what else can we do..."

As social distancing was eased to Level 1, merchants met on the afternoon of the 16th in the Myeongdong area of Jung-gu, Seoul, where small business owners and self-employed people gathered, showing a small sense of hope. However, there were also complaints that returning to the pre-COVID-19 situation is difficult.

Mr. Kim, in his 50s, who runs a restaurant near the Myeongdong intersection, said, "Apart from the sales from office workers nearby coming for lunch on weekdays, evening gatherings and meetings have significantly decreased," adding, "Not just us, but many are still struggling due to COVID-19." He continued, "I think things might improve now that social distancing has been lowered to Level 1."

On that day, not only this restaurant but also nearby eateries showed only small groups of customers visiting in twos or threes, even considering the evening hours, with no signs of group gatherings. This is why merchants sigh, saying the Myeongdong commercial district cannot return to its pre-COVID-19 state.

There were also sighs from self-employed people in retail. Mr. Lee, a person in his 40s who runs a shoe store, explained, "Looking at the characteristics of previous customers, many used to buy sneakers as a fashion statement even if their shoes were still fine," adding, "Since COVID-19 started, customers literally come to buy only practical shoes or those who have worn out their shoes visit a lot." This is interpreted as an opinion that many people have reduced unnecessary spending due to the economic downturn after COVID-19.

A building for rent in Myeongdong, Jung-gu, Seoul. Photo by Seunggon Han hsg@asiae.co.kr.

Meanwhile, there were no people to be found visiting street vendors around this intersection area. Although social distancing was lowered to Level 1, this can be interpreted as the commercial district itself not being revitalized. Also, in alley areas far from the commercial center, buildings with stores completely cleared out and put up for rent could be seen here and there.

As sighs from self-employed people increase due to COVID-19, the government recently diagnosed that uncertainty in the Korean economy continues.

The Ministry of Economy and Finance (MOEF) stated in the October issue of 'Recent Economic Trends' published on the 16th, "Since mid-August, uncertainties in the real economy continue, such as restrictions on the recovery of domestic demand and employment indicators due to the resurgence of COVID-19."

Jobs are also decreasing. According to the employment trends announced that day, the number of employed people in September decreased by 392,000 compared to the same month last year.

There are continued sighs from ordinary people regarding prices. Due to heavy summer rains, prices of agricultural, livestock, and fishery products surged, causing overall prices to rise by 1% compared to the same month last year. Vegetable prices rose by as much as 34.7% year-on-year.

As social distancing measures have been eased to Level 1, the area around Myeongdong street appears quiet. Photo by Han Seung-gon hsg@asiae.co.kr.

The MOEF viewed September private consumption as "positive factors such as increased domestic sales of domestically produced passenger cars and increased online sales," but "negative factors such as decreased department store sales are expected to act." Regarding corporate facility investment, it forecasted "a decline in manufacturing average operating rates as a negative factor."

As a result, citizens expressed that it seems too early for the commercial district to become active due to social distancing Level 1, but showed small hopes.

Mr. Kim, a man in his 40s working near a restaurant met that day, said, "Although social distancing has been lowered, the economy is so tough that everyone is cutting back on spending," adding, "How can we overcome this economic downturn? This seems to be a problem going forward."

Another office worker in his 30s, Mr. Park, said, "Since the COVID-19 situation continues, we are reducing various expenditures," adding, "If it's not absolutely necessary, we don't buy much. Because of this, small business owners and other industries are definitely having a hard time."

Mr. Lee, a company employee in his 40s, said, "Since social distancing has been somewhat eased, I think more people will visit theaters and restaurants," but added, "It is also important to have an atmosphere where no new confirmed cases appear going forward."

Meanwhile, Deputy Prime Minister and Minister of Economy and Finance Hong Nam-ki said in a post on his Facebook that day, "The decrease in major face-to-face service industries such as lodging, food, retail, and education was significant," adding, "The impact of social distancing Level 2.5 due to the resurgence was too great."

He continued, "The government is taking the employment market situation more seriously than ever," and said, "Considering that social distancing was eased to Level 1 from the 12th and consumption indicators such as card approval amounts are showing signs of recovery, we cautiously expect employment improvement to resume from October."