🚨 Non-Wage Workers

Today Korean Social News for Beginners | 2025.07.29

0️⃣ Self-Employed and Unpaid Family Workers: Key Signs of Job Instability

📌 Honam Region Only Area with Job Losses…Non-Wage Workers Main Cause

💬 The Honam region was the only major area in Korea where jobs decreased in the first half of this year. Even though regular employees increased slightly in Gwangju, South Jeolla, and North Jeolla provinces, the total number of workers fell by 35,000 because non-wage workers decreased by 44,000. Poor construction business and young people leaving the region are the main reasons. Non-wage workers include self-employed people and unpaid family workers. They are job indicators that react quickly to economic changes. Experts stress the need for customized job policies that fit each region's needs and support programs for self-employed businesses.

💡 Summary

• Non-wage workers are self-employed people and unpaid family workers who work independently without employment contracts.
• They have less job security and stable income than regular employees and are sensitive to economic changes.
• The decrease in non-wage workers in the Honam region was the main reason for job losses there.

1️⃣ Definition

Non-wage workers are workers who work independently without employment contracts that guarantee regular pay. Unlike regular employees who sign work contracts with companies and receive steady wages, these workers run their own businesses or help family businesses without pay.

They earn income by running their own businesses or providing specific skills and services. They have relatively independent positions in employment relationships. However, they are less stable than regular employees in terms of income and job security.

💡 Why is this important?

• It's an important indicator for understanding the employment structure and stability of the entire economy.
• They are the most vulnerable group affected first when the economy changes.
• They easily fall into blind spots of social security systems.
• They are important parts that form the foundation of local economies.

2️⃣ Types and Characteristics of Non-Wage Workers

📕 Main Types and Features

• Self-employed people are the most typical non-wage workers. Main features include:

  • They directly run their own businesses and take business risks themselves.
  • They work in various industries like restaurants, retail, and services.
  • Their income varies based on business performance, so income can be unstable.
  • They can control their own working hours but often work long hours.
  • They must join the National Pension and Health Insurance as regional subscribers.

• Unpaid family workers are also important members. Main features include:

  • People who work more than 18 hours per week without wages in family-run businesses.
  • They mainly appear in agriculture, small commerce, and traditional manufacturing.
  • They are legally recognized as workers but don't receive actual wages.
  • They have low social insurance enrollment rates and easily fall into social security blind spots.
  • Women and elderly people make up relatively high portions.

📕 Differences from Regular Employees

• There are big differences in job stability. Main differences include:

  • Regular employees have job security through work contracts, but non-wage workers' income depends on business performance.
  • During economic downturns, non-wage workers are more likely to lose jobs or close businesses first.
  • It's difficult to receive unemployment benefits, severance pay, and other employment insurance benefits.
  • They don't receive protection from labor standards laws, limiting improvements in working conditions.

• Income structure and social security are also different. Main differences include:

  • Regular employees receive steady and predictable wages, but non-wage workers have irregular business income.
  • Business owners pay business income tax and may have value-added tax reporting duties.
  • They must pay full National Pension and Health Insurance premiums themselves.
  • It's difficult to receive industrial accident insurance, making it hard to get protection for work-related injuries.
  • It's difficult to guarantee worker rights like paid leave and maternity leave.

💡 Major Difficulties Non-Wage Workers Face

1. Income Instability: Large income changes due to economic conditions or seasons
2. Social Security Blind Spots: Limited benefits from employment insurance and industrial accident insurance
3. Long Working Hours: Often work without limits on holidays or working hours
4. Capital Burden: Difficulty securing initial investment and operating funds for business
5. Lack of Expertise: Insufficient professional knowledge in management, marketing, and financial management

3️⃣ Honam Region Job Loss Status and Causes

✅ Regional Employment Trend Analysis

• Only the Honam region had decreasing numbers of workers. Main status includes:

  • Honam region (Gwangju, South Jeolla, North Jeolla) workers decreased by 35,000 compared to the same period last year in the first half.
  • During the same period, the Seoul metropolitan area increased by 270,000, Yeongnam region by 80,000, and Chungcheong region by 40,000.
  • Within the Honam region, regular employees increased by 9,000, but non-wage workers decreased by 44,000.
  • This accounts for 126% of the total worker decrease, showing that non-wage worker reduction was the main cause.

• Construction industry was hit hardest by industry. Main analysis results include:

  • Construction workers decreased significantly, directly hitting related self-employed people.
  • Construction industry recession due to real estate market downturn greatly affected the regional economy.
  • Self-employed people in wholesale/retail and accommodation/restaurant services also showed decreasing trends.
  • In agriculture, unpaid family workers decreased rapidly due to aging and young people leaving.

✅ Structural Problems and Response Plans

• Young people leaving is weakening the regional economic foundation. Main problems include:

  • Continuous outflow of young people to the Seoul metropolitan area is reducing consumption and investment in the region.
  • Young entrepreneurship and family business succession are becoming difficult, shaking traditional self-employment foundations.
  • Lack of quality jobs in the region creates a vicious cycle where university graduates move to other areas.
  • Rapid aging is drastically reducing unpaid family workers in agriculture and traditional manufacturing.

• Government and local government responses are needed. Main measures include:

  • Customized job creation policies that fit regional characteristics are urgent.
  • Expansion of startup funding support and business consulting for self-employed people is necessary.
  • Comprehensive policy packages including housing support and startup support for young people to settle are required.
  • It's important to find new growth drivers through digital transformation of traditional industries and fostering new industries.
  • Expanding social security for non-wage workers and improving working conditions should be considered.

4️⃣ Related Term Explanations

🔎 Regular Employees

• Regular employees are workers who sign employment contracts and receive steady wages.
  • Regular employees are workers who sign work contracts with businesses or organizations and receive steady wages or salaries in return. The employer-employee relationship is clear, and they receive protection from labor standards laws.
  • Main characteristics of regular employees include: First, they work according to set working hours and conditions. Second, they receive steady wages in monthly salary or hourly wage forms. Third, they receive protection from social insurance like employment insurance and industrial accident insurance. Fourth, they get guaranteed worker rights like paid leave and severance pay.
  • Regular employees are divided into permanent workers and temporary/daily workers. Permanent workers are expected to work continuously for more than one year, while temporary/daily workers are employed temporarily or have work contracts less than one year. Recently, the distinction between regular and irregular workers has also become an important classification standard.

🔎 Employment Rate

• Employment rate is the percentage of employed people among the working-age population.
  • Employment rate is an indicator showing the percentage of employed people among the working-age population aged 15 and over. It's calculated as (number of employed ÷ working-age population) × 100 and is a key indicator for understanding employment conditions in a country or region.
  • The meaning of employment rate includes: First, it measures the degree of economic activity participation. Second, it serves as a standard for judging labor market health along with unemployment rate. Third, it's used as an indicator to evaluate government employment policy performance. Fourth, it can identify relative position through international comparisons.
  • Korea's employment rate is lower than the OECD average, and improving employment rates for women and young people has emerged as a policy issue. Regional employment rate gaps exist between the Seoul metropolitan area and provinces, and between cities and rural areas, requiring efforts for balanced development.

🔎 Social Insurance

• Social insurance is a mandatory enrollment insurance system operated by the state.
  • Social insurance is an insurance system where the state mandates enrollment by law for people's life stability and welfare improvement. Its purpose is to protect citizens from social risks and guarantee minimum living standards.
  • Korea's four major social insurance systems include: First, National Pension guarantees retirement income. Second, Health Insurance reduces medical cost burdens. Third, Employment Insurance supports livelihood during unemployment and provides job training. Fourth, Industrial Accident Insurance compensates for work-related injuries.
  • Looking at non-wage workers' social insurance enrollment status, they can join National Pension and Health Insurance as regional subscribers but must pay full premiums themselves. Employment Insurance and Industrial Accident Insurance are principally for workers only, so self-employed people can only join through special provisions. This makes non-wage workers likely to fall into social security blind spots.

5️⃣ Frequently Asked Questions (FAQ)

Q: Can non-wage workers receive unemployment benefits?

A: It's not possible in principle, but there are some exceptions.

• Unemployment benefits are payments for regular employees enrolled in employment insurance who become unemployed involuntarily, so general self-employed people are not eligible. However, there are several exceptional situations. First, self-employed people can join employment insurance through special provisions. Self-employed people with average monthly income less than 2.2 million won can join employment insurance if they want, and in this case, they can receive unemployment benefits when they stop their business. Second, when someone changes from a regular employee to self-employed and then becomes a regular employee again, their previous employment insurance enrollment period can be recognized. Third, special form workers have been included in employment insurance coverage since 2012 and can receive unemployment benefits.
• However, for self-employed special enrollment, joining conditions and benefit levels differ from general workers, so please check detailed information in advance.

Q: Is it good for the economy when non-wage workers increase?

A: It depends on the situation and requires a balanced perspective.

• Increasing non-wage workers has both positive and negative aspects. Positive aspects include: First, it can contribute to economic vitality through entrepreneurship and innovation. Second, it provides opportunities to demonstrate individual creativity and autonomy. Third, it can improve shock absorption ability by increasing economic structure diversity. Fourth, it can increase employment through creating new markets and services. However, there are also negative aspects. First, higher employment instability can increase income volatility for society as a whole. Second, there are concerns about expanding social security blind spots. Third, if low-productivity self-employment increases, overall economic efficiency can decline.
• Therefore, what's important is not the absolute number of non-wage workers but the qualitative aspect. It's desirable for innovative and high-productivity startups to increase, but rapid growth of survival-based self-employment or unstable jobs can negatively affect the economy.