IMF and Fried Chicken Restaurants Boom in South Korea
April 26, 2019 by Jeong Ye Eun
The movie called ‘Extreme Job’ was big hit by reflecting the self-employment reality in South Korea with comic elements. The middle-aged main character of the movie who opens a fried chicken restaurant is a symbol of most middle-aged people in South Korea today.
Recently, the number of self-employed people is soaring in Korea, and most of them are retired employees from companies. Since fried chicken is the most popular menu in Korea, opening fried chicken restaurants became the easiest choice to make for self-employed workers.
As a result, now in Korea, the number of fried chicken restaurants is higher than the number of McDonalds in worldwide. While Mcdonalds has almost 3 million 5 thousand number of restaurants, South Korea has about 3 million 6 thousand number of fried chicken restaurants.
Then why and from when, those retired workers decide to be self-employed?
In the year of 1997, IMF financial crisis occurred in South Korea, and it has changed the Korean economic structure.
After IMF implemented structural adjustment program on Korea, foreign investors took a large amount of Korean capital from major companies,
As a result, only the conglomerate companies could survive, and the number of working places sharply decreased. The gap between rich and the poor is enlarged, and social polarization became serious social problem to solve.
Now, if Korean GDP increases, the profits go to multinational companies, and, growth in Korean GDP does not assure the increase in employment rate. Consequently, if companies want to hire new employees, they need to fire existing workers, since the job places are too limited to hire all new and old employees. Today, the retirement age of workers in South Korea is decreased from 60s to 40s.
Korean people nowadays are forced to be self-employed as they have nowhere to go to be hired. Especially the middle-aged male workers who are forced to retire from companies, but have family that they must care, have no alternative other than choosing self-employment and opens their shops.
Before IMF, when those middle-aged male workers retire in their age of 60s, usually their kids already graduated college and have their own jobs. However, now, if middle-aged workers retire at the age of 40s, their kids are still in high school or in college. Even if kids already graduated college, they cannot find jobs easily due to high young unemployment rate.
Therefore, middle-aged retired workers open fried chicken restaurants as their final destination. According to OECD statistics in 2017, South Korea’s percentage of self-employment out of total employment was 25.4%, which is the fifth highest among OECD countries. Compares to Japan, which has 10.4%, South Korea’s percentage is as twice much as Japan’s even though Korea and Japan share similar economic structure. OECD statistics reveal how Korean people deeply rely on self-employment.
However, the real social problem is that as they hastily open the shops without proper preparation, most of those shops face bankruptcy and bring harsher economic conditions to households. Since retired workers usually use their severance pay to open the shops, if they failed in running the shops, they lose everything and have nothing left.
22 years has been passed from 1997 IMF financial crisis, but the aftermath of 1997 still tortures South Korean society today. 3 million 6 thousand, behind such monstrous number, there is a disastrous history and reality that we should not ignore.