As of 2022, the number of one-person non-wage workers—such as special-type workers, platform laborers, and freelancers who operate without formal employment contracts—has exceeded 8.47 million. (Image courtesy of Yonhap)
SEOUL, June 25 (Korea Bizwire) — More than 8.47 million South Koreans—including freelancers, gig workers, and platform laborers—now make up a major portion of the labor market, yet remain largely excluded from the country’s national pension system, a new government report has found.
The Korea Institute for Health and Social Affairs (KIHASA) released a report Tuesday warning that these so-called “non-salaried one-person workers” are caught in a persistent “avoidance equilibrium,” where unstable income, high individual premium burdens, and deep mistrust in the pension system deter participation.
In 2022, these workers accounted for a significant and growing segment of the workforce, but most remained outside the safety net of the National Pension Service (NPS), which forms the backbone of South Korea’s public retirement system. The study highlights both structural policy gaps and widespread misconceptions—many workers mistakenly believe the pension is optional.
Through interviews with 36 stakeholders—including workers, business owners, and labor group officials—the report identified several barriers. Chief among them is economic pressure: unlike salaried employees whose employers cover half their premiums, non-salaried workers must shoulder the entire cost, regardless of income fluctuations.
The report also pointed to a crisis of confidence. Repeated media coverage of the pension fund’s projected depletion has convinced many that the system won’t be solvent when they retire. A lack of proactive engagement from the national health insurance service—tasked with collecting pension premiums from regional enrollees—further reinforces the belief that opting out is acceptable.
One potential solution—reclassifying gig and freelance workers as “workplace subscribers,” thereby requiring employers or platforms to share pension contributions—met resistance. While workers welcomed the reduced burden, businesses feared it would lead to fee reductions, fewer assignments, or added costs for small employers.
The report concluded that piecemeal fixes are insufficient. It called for sweeping reforms, including:
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A flexible premium structure reflecting irregular income;
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Government subsidies for low-income regional subscribers;
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And legally mandating social insurance contributions from de facto employers like platform companies.
Most critically, the report urged the government to restore public trust by guaranteeing pension payouts in law and transparently disclosing fund management.
“South Korea’s labor market has changed, but the pension system hasn’t kept pace,” the report warns. Failing to integrate this vast segment of the workforce risks a future burden of greater social costs and undermines the nation’s core retirement safety net.
M. H. Lee (mhlee@koreabizwire.com)
