Hourly wages rise due to labor shortage... Average 11,354 won
[Asia Economy Reporter Heo Midam] # Hwang Eun-hye (32, pseudonym), a self-employed person running a Korean restaurant in Mapo-gu, Seoul, has recently been struggling to hire hall-serving part-time workers. Despite raising the hourly wage from 11,000 won to 12,000 won, she has had no applicants, causing her great difficulty. She lamented, "It's hard because of the lack of manpower," adding, "These days, even when I post that I'm hiring staff, the number of views on the post is very low. Interest in part-time jobs seems to have decreased a lot compared to before."
Recently, the labor shortage in face-to-face service industries such as hotels, restaurants, and cafes has continued. Since social distancing measures were lifted in April after 2 years and 1 month, the number of customers has increased, but the workforce has not been replenished to the same extent as before. Some self-employed individuals have offered wages above the minimum hourly wage as an incentive, but the labor shortage remains. Self-employed people are facing a double burden as soaring prices make it even harder to find workers.
According to the job search site Alba Cheonguk, the number of part-time job postings in the first quarter of this year increased by 40.2% compared to the first quarter of last year, but the number of applicants increased by only 1.3%. This means that while more self-employed people are looking for employees than before COVID-19, fewer people want to work part-time.
As a result, self-employed individuals are reluctantly raising hourly wages. Among the Alba Cheonguk job postings registered from January to June this year, 55.8% were hourly wage postings, and the average hourly wage for these postings was 10,354 won. This is 1,194 won higher than the current minimum wage of 9,160 won.
There are various reasons for the labor shortage among young people. First, the decline in the youth population is cited. According to Statistics Korea, as of May this year, the youth population (ages 15?29) was 8,595,000, a decrease of about 478,000 compared to 9,073,000 in 2019 before COVID-19. The youth group, which includes university students and job seekers, is the age group most actively engaged in face-to-face service part-time jobs. Although the youth population has been steadily decreasing, the pace has recently accelerated, with a decrease of 204,000 (2.3%) compared to the previous year just this year.
It is also related to the tendencies of the younger generation. The MZ generation (Millennials + Generation Z) tends to value their own time and prefer short-term part-time jobs. They also want to gain experience that can help with employment, so simple labor-intensive jobs seem to be avoided.
Moreover, with various government supports such as unemployment benefits and youth subsidies becoming more substantial, some young people do not feel the need to work part-time. Since employment support systems are well established, they judge that it is better to focus on job hunting rather than spending time and energy on part-time work.
As a result, it has become even more difficult to find workers for high-intensity jobs such as meat restaurants and bars, deepening the worries. A netizen who runs a meat restaurant expressed on the self-employed community "Apeunikka Sajangida" ("Because It Hurts, I'm the Boss") that "I don't know why employees are not being hired these days. Even at 12,000 won per hour, I can't find anyone. Do I have to pay more than this hourly wage?" Comments on the post included, "Even with high wages, people don't want to do hard work," "I ended up renting a serving robot because I couldn't find staff," and "I barely found someone at 14,000 won per hour."
Meanwhile, the government has decided to provide customized financial support worth 41.2 trillion won to self-employed people and small business owners who suffered from COVID-19. The plan is to supply customized policy funds totaling 41.2 trillion won over the next two years, including liquidity supply for self-employed and small business owners (10.5 trillion won), competitiveness enhancement (29.7 trillion won), and recovery support (1 trillion won).
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