The number of self-employed people continued to fall in the four months through January, 2025 (Image courtesy of Yonhap)
SEOUL, March 23 (Korea Bizwire) — Nearly half of South Koreans over the age of 50 who transitioned from wage employment to self-employment are earning less than the country’s minimum wage, highlighting the precarious financial situation of older entrepreneurs.
According to a report released on Sunday by the Korea Employment Information Service, analysis of Korea Welfare Panel data from 2006 to 2022 shows that 58.8% of individuals who moved from wage work to self-employment by 2022 were aged 50 or older. For many, starting a business has become a last resort after retirement.
More than half (53.8%) of these older self-employed individuals are engaged in low-margin, low-value-added sectors such as retail and consumer services — so-called “subsistence businesses.” In addition, 83.4% are operating as “one-person businesses” with no employees, higher than the national average of 75.6%.
Income levels paint a bleak picture. Older entrepreneurs with only one to three years of prior wage employment earned the highest average monthly income at 3.38 million won (approximately $2,330), but this still fell short of the 3.79 million won average salary of full-time wage workers over the last three months.
Those with longer wage employment histories before starting their businesses earned marginally more, but income disparities were minimal.
Most concerning, the study found that 48.8% of self-employed individuals over 50 earned less than the monthly minimum wage. Those who had no prior experience in the industry they entered reported net incomes averaging just 1.44 million won, with 82.9% classified as low-income earners.
As loan delinquency rates among self-employed individuals continue to rise, the number of businesses closing due to overwhelming debt burdens is steadily increasing. (Yonhap)
The disparity between business types was stark: subsistence entrepreneurs earned around 2.25 million won monthly, compared to 3.43 million won for non-subsistence business owners. Self-employed individuals without employees earned just 2.27 million won, less than half of the 5.41 million won earned by those with employees.
Income also declined sharply with age. While 50-something entrepreneurs reported an average monthly income of 3.80 million won, those over 60 earned only 1.43 million won.
Alarmingly, 75.8% of these older entrepreneurs were classified as low-income earners. Among those in their 70s and older, the proportion running subsistence-level businesses surged to 89.7%, placing many in what the report described as “extreme poverty.”
The report called for stronger government policies to support job placement for older workers and to improve the economic sustainability of self-employed seniors. “Older workers should not be forced into precarious businesses due to labor market instability,” the report noted, urging targeted programs to raise incomes for those already operating subsistence-level ventures.
M. H. Lee (mhlee@koreabizwire.com)
