[Editorial] Preventing Catastrophe Among the Self-employed

Temporary and daily workers are being hit the hardest by the economic downturn, with their number falling below seven million, down 267,000 from a year earlier. The year-on-year decline is the fastest in nearly four and a half years. The ranks of the unemployed, including those either seeking jobs or who have given up doing so, was 3.46 million last month, up 260,000 from a year ago. Slumping domestic spending and the ensuing collapse of the self-employed are the consequences of the deteriorating job market. If the vicious circle of worsening economic conditions, mass bankruptcies and slumping domestic consumption continues, this will spell doom for the self-employed.

The number of self-employed individuals dropped 200,000 last month. Over the past two months, 420,000 small and family-owned shops either suspended operations or went belly up. Last year saw the number of the self-employed fall below six million for the first time since 2000, and the situation worsened last month with the figure dropping below 5.6 million. Of those who have stayed afloat, only 22 percent are said to be earning profits, signaling further bankruptcies down the road. This grim situation has prompted the ruling Grand National Party`s chief policymaker Yim Tae-hee to predict a major disaster for the self-employed.

The manufacturing sector can avoid layoffs to an extent through subsidies and job sharing measures. The self-employed, however, do not have that luxury. Once a small business is liquidated, re-employment is virtually impossible for staff. Without drastic measures, one million more workers will likely lose their jobs this year. This will trigger social unrest.

To jumpstart the economy, the ruling party and the government are pushing for an extra budget of 10 trillion won (6.8 billion U.S. dollars). If stimulation of domestic consumption is needed to avert a catastrophe among the self-employed, an increase in the supplementary budget is needed. Other needed measures include debt rollovers for independent businesses, interest rate cuts, tax breaks and the issuance of consumption coupons. One commendable measure is encouraging public officials to eat lunch at restaurants instead of cafeterias once a week. This should be part of a government effort to look for all possible measures to help the self-employed.