When people start a business, they say they are finally happy to hear the word “CEO”, but in reality, most are self-employed people trying to make a living. They are people who quit their jobs early in their 40s or 50s due to corporate restructuring and started a business to make a living. Out of the 5.6 million self-employed people, 2 million are over 60 years old.
Since they quit their jobs and jumped into business without preparation, most of them start jobs that do not require any special skills. However, the startup market is saturated. There is a chicken restaurant next to a chicken restaurant, and a convenience store next to a convenience store.
You have no choice but to sell cheaper than other stores to survive in such a situation. This means that you have to maintain a low-profit margin. However, even the money you earn ends up being used for bank loans and franchise royalties, so there is nothing left. Recently, rents have increased and delivery service fees have increased, adding to their problems. It would be a blessing to just keep the store open, but often you add more debt to debt to stay in business and when unable to repay the debt the business closes.
According to the National Tax Service, the number of business owners who reported closure in this way was close to 1 million last year alone. It is an increase of 120,000 compared to the year before last, recording the highest number since statistics were compiled in 2006. This is the highest since the IMF (International Monetary Fund).
The self-employed business closure rate will reach 10% as of 2023, meaning that one in 10 self-employed businesses will close every year. Self-employed people who held on even during COVID-19 are no longer able to do so. People often say that self-employment is the core of the common people's economy. The common people's economy is now collapsing.
The biggest reasons for store closures are high interest rates and high prices. The number of people who cannot repay their startup loans and are delinquent on their payments is increasing. The details are serious. 50% of individual business borrowers are multiple debtors. Half of the self-employed are paying off their debts with debt. In particular, the delinquency rate of vulnerable self-employed people with multiple debts and low incomes is over 10%. On top of that, there are skyrocketing rents and franchise royalties. It’s not because the owner is sick, but having to live in hell.
The restaurant franchise industry is large and recently we have heard about a conflict between the head office and franchisees because of the collapse of the self-employed.
Self-employed business owners are having problems not due to part-time workers who earn the minimum wage of 10,000 won or delivery riders who earn high fares, but rather because of a bigger structural problem. They start franchises with low skills using personal business loans, but in the end, the money is not earned by the self-employed business owners, but by others. That’s why the self-employed are crying out not only to franchise headquarters, but also to building owners, the government, and delivery platforms.
The government needs to check if companies are monopolizing information or abusing their power. The political world needs to stop fighting with hatred and dividing people and look after the people’s livelihoods. They need to wipe away the tears of the self-employed with real actions, not empty promises. Just as Jesus did, we, as well as the church, must be with those who cry out that they are sick. We must hurry.
The columnist hopes this will all change in the future and we will be seeing more smiling self-employed CEOs.