Independent business ownership drops 457K under Lee administration

[한겨레] The economic crisis along with support for super-supermarkets have been pinpointed as sources of the significant fall

By Jung Se-ra, Staff Writer　

The collapse of independent business has been gaining speed since the Lee Myung-bak administration took office. Over the past three years, the number of independent business owners fell by 457 thousand. In particular, the year 2009 saw a 259 thousand person drop, the largest since a 285 thousand decrease in 1998 in the immediate wake of the foreign exchange crisis.

In actuality, independent business had already reached saturation point prior to the arrival of the Lee administration, in terms of the country's economic scale and employment structure. This was the result of trend in which people enduring constant corporate restructuring and employment insecurities set up small businesses such as fried chicken restaurants after receiving their pink slips. In 2008, independent businesses owners represented 25.3 percent of all employed, nearly twice the Organisation for Economic Co-operation and Development (OECD) member nation average of 13.6 percent.

For self-employed entrepreneurs operating neighborhood restaurants, bakeries, and convenience stores, the real ordeal began when the Lee administration took office. In addition to a major blow from the global financial crisis, an increasing number of large corporations entered direct competition with these entrepreneurs. Large retailers moved in on small-scale commercial districts with so-called "super-supermarkets" (SSMs), including E-Mart and Lotte Martt, which threaten neighborhood convenience stores, and mom-and-pop stores, and large corporation bakery franchises shoved out local bakeries. For small-scale independent business owners with limited financial capabilities, the situation has become one where survival is difficult.

The total number of independent business owners in 2010 stood at about 5,592,000, down 457 thousand (about 8 percent) from the 6,049,000 recorded in 2007, the last year of the Roh Moo-hyun administration. This means that the speed of the collapse of independent business increased by a large margin from its rate during the Roh administration, which saw a decrease of 142 thousand over its five-year term.

The pinpointed problem is that the faster rate of collapse, coupled with a failure to supply sufficient jobs, is driving the working-class to the brink. In the absence of a proper social safety net, those who close their doors find themselves either in low-quality jobs or joining the non-economically active population that has effectively giving up on finding work.

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