Impact of Increased Labor Cost Burden Due to COVID-19 Aftermath
[Asia Economy Reporter Kim Cheol-hyun] The number of employees in the retail and accommodation and food service sectors has fallen to its lowest level in 7 years and 6 months. This is interpreted as reflecting the impact on self-employed individuals caused by the novel coronavirus infection (COVID-19).
According to the Small and Medium Business Research Institute and Statistics Korea on the 21st, the number of employees in the retail and accommodation and food service sectors last month was recorded at 5,515,000, a decrease of 432,000 compared to the same period last year. This is the lowest figure since March 2013, when it was 5,499,000. The number of employees in these sectors has decreased for nine consecutive months compared to the same period last year. This decline has occurred every month this year, with the largest drop recorded last month.
Due to the resurgence of COVID-19, social distancing measures at level 2 were implemented in the metropolitan area in mid-August, and on the 30th of the same month, the level was raised to 2.5. As social distancing measures were strengthened, self-employed individuals had to either suspend operations or operate only during designated hours, which is believed to have caused greater damage.
With the atmosphere of refraining from going out, gatherings, events, and travel significantly decreased, self-employed individuals experienced a sharp decline in sales, and due to burdens such as rent and labor costs, some self-employed individuals even had to let go of their employees. Last month, the number of self-employed individuals with employees was 1,332,000, a decrease of 159,000 compared to the same month last year. On the other hand, the number of self-employed individuals without employees increased by 81,000 to 4,222,000.
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