Growth in self-employed slowest since Aug. 2011
The number of self-employed people grew at the slowest pace in November since August of last year, suggesting that baby-boomers have become unwilling to start their own businesses due to worsening economic conditions.
According to data compiled by Statistics Korea yesterday, on-year growth reached its peak of 196,000 in July but has been declining since then to 38,000 last month.
The November figured marked the smallest growth since August 2011, when the number started rising for the first time in five years.
The increase in the number of the self-employed has been a serious problem that has posed a threat to the country’s economic growth, since most started new businesses with loans and ended up with large amounts of debt.
Most self-employed people are baby-boomers who were born between 1955 and 1964. In the wake of the global financial crisis in 2008, they have faced early retirements in recent years.
According to the Ministry of Strategy and Finance, the main cause of growth and decrease in the number of the country’s self-employed people are those in their 50s. On a monthly basis, three out of five new self-employed people were over 50, according to the ministry’s statistics.
Kim Seon-bin, a researcher at the Samsung Economic Research Institute, said there are three main causes of the expanding self-employed population: low entry barriers to the retail, food and accommodation industries; a fast-aging society; and rising household debt.
“Easy entrance to the industries has made the retired baby-boomers heatedly compete with each other,” Kim said. “Many of them faced mounting debt and gained no profit, ending up with bankruptcies.”
However, the number of self-employed in their 50s dropped sharply to 3,000 last month, after hovering around 100,000 until April.
According to an analysis by the Finance Ministry, the number of baby-boomers who re-entered small manufacturing companies after their first retirements has been lately inching up since September, though slowly, contributing to curbing the growth in the self-employed population.
The number of those aged over 50 who were hired by small businesses grew by 19,000 in July from a year earlier. In November, the growth widened to 28,000.
By Song Su-hyun [email@example.com]