By Choi Sung-jin
It's 12:40 a.m. Tuesday but there are some customers at a convenience store in Songpa-gu, southeastern Seoul -- a young man picking gimbap (seaweed rolls), a girl choosing ice cream and a couple in their 30s grabbing a bottle of soju (Korean vodka).
The average customer transaction at a convenience store is 5,000 won ($4.50). If a store can secure 300 customers a day, it can collect 1.5 million won -- 45 million won a month. After deducting costs, franchise fees, rent and wages, however, store owners can take home about 2 million won, at most.
These convenience stores that have been springing up everywhere in recent years -- you can hardly walk 50 meters without running into one in this capital city -- is the space that talks much about the economic reality of Korea today.
According to the Korean Association of Convenience Stores, the combined sales of C-stores amounted to 9.13 trillion won in the first half of this year. If that pace continues, their annual sales are expected to top last year's 16 trillion won and enter the 20 trillion won range. Hidden behind the explosive growth of convenience stores are various "inconvenient truths" of Korean society, including its income ladder.
For starters, there are working students providing all-night service at little more than minimum wages. Above them are store owners forced out of their workplaces far earlier than before who open a store to make ends meet. Above them are landlords who bought the building for their old age with bank loans. At the top of this food chain are large enterprises who take franchise fees from store owners. The succession of relationships between top dog and underdog is the abridged version of this polarizing society.
Nine out of 10 store employees are college students. Their average hourly wage of 6,232 won is less than fast-food workers and delivery men.
Many of them cannot receive even that wage amid rampant payment delays, violations of the minimum wage law, physical and verbal abuse, unfair dismissal and sexual harassment. The Labor Standard Law is more often than not out of their reach. They have to do overnight work without additional allowances or receive below minimum wages under the pretext of probation or a training period.
Not a few of these working students attend lectures, do homework and seek jobs during daytime and work at these stores four hours every night.
"Often we have to compete with elderly job seekers with our parents' age over this job, with monthly salary of 500,000 won or so," a student said.
Storeowners are not very happy, either.
There are two major options middle-aged Korean workers all but forced out of work can take -- open a chicken restaurant or a convenience store. Those who take the latter option have to invest nearly 100 million won, including premiums and security deposits, and rake in 1.5 million won in daily sales. After taking off 2 million won in rent, more than 1 million won in various utility bills and 4.5 million won for employee wages, he or she ends up with 2 million won in hand.
About a third of these store owners are 40-something former office workers with no particular skills or capital. "If I keep the store open most of the day, except for night time, I can earn up to 4 million won a month," said a store owner in a college town. "The good old days are numbered, however, given the mushrooming of convenience stores in this block alone."
Some are being punished for their success, falling prey to landlords who kick out store owners of prospering convenience stores to give the space to their relatives or friends.
Experts say the "crisis of self-employed" goes beyond the low productivity of the domestic service industries and is interlocked with a rigid labor market and an underdeveloped industrial structure.
"Korea should restructure its wage system to a ‘leaner and longer' style," said Professor Cho Jun-mo of Sungkyunkwan University. "The legal retirement age has been raised to 60 but the nation can ensure the stability of employment and income only when it successfully implements a peak wage and performance-based pay system." Before wage earners transform themselves into self-employed, businesses need to extend their careers through the peak wage system, he said.
Raising the efficiency of the self-employed is another important task. "The government ought to provide more elaborate vocational training and support for startups so that retired people can make the best use of their lifetime careers instead of jumping into simple menial jobs not related with their aptitudes or expertise," Professor Cho said.
It's 12:40 a.m. Tuesday but there are some customers at a convenience store in Songpa-gu, southeastern Seoul -- a young man picking gimbap (seaweed rolls), a girl choosing ice cream and a couple in their 30s grabbing a bottle of soju (Korean vodka).
The average customer transaction at a convenience store is 5,000 won ($4.50). If a store can secure 300 customers a day, it can collect 1.5 million won -- 45 million won a month. After deducting costs, franchise fees, rent and wages, however, store owners can take home about 2 million won, at most.
These convenience stores that have been springing up everywhere in recent years -- you can hardly walk 50 meters without running into one in this capital city -- is the space that talks much about the economic reality of Korea today.
According to the Korean Association of Convenience Stores, the combined sales of C-stores amounted to 9.13 trillion won in the first half of this year. If that pace continues, their annual sales are expected to top last year's 16 trillion won and enter the 20 trillion won range. Hidden behind the explosive growth of convenience stores are various "inconvenient truths" of Korean society, including its income ladder.
For starters, there are working students providing all-night service at little more than minimum wages. Above them are store owners forced out of their workplaces far earlier than before who open a store to make ends meet. Above them are landlords who bought the building for their old age with bank loans. At the top of this food chain are large enterprises who take franchise fees from store owners. The succession of relationships between top dog and underdog is the abridged version of this polarizing society.
Nine out of 10 store employees are college students. Their average hourly wage of 6,232 won is less than fast-food workers and delivery men.
Many of them cannot receive even that wage amid rampant payment delays, violations of the minimum wage law, physical and verbal abuse, unfair dismissal and sexual harassment. The Labor Standard Law is more often than not out of their reach. They have to do overnight work without additional allowances or receive below minimum wages under the pretext of probation or a training period.
Not a few of these working students attend lectures, do homework and seek jobs during daytime and work at these stores four hours every night.
"Often we have to compete with elderly job seekers with our parents' age over this job, with monthly salary of 500,000 won or so," a student said.
Storeowners are not very happy, either.
There are two major options middle-aged Korean workers all but forced out of work can take -- open a chicken restaurant or a convenience store. Those who take the latter option have to invest nearly 100 million won, including premiums and security deposits, and rake in 1.5 million won in daily sales. After taking off 2 million won in rent, more than 1 million won in various utility bills and 4.5 million won for employee wages, he or she ends up with 2 million won in hand.
About a third of these store owners are 40-something former office workers with no particular skills or capital. "If I keep the store open most of the day, except for night time, I can earn up to 4 million won a month," said a store owner in a college town. "The good old days are numbered, however, given the mushrooming of convenience stores in this block alone."
Some are being punished for their success, falling prey to landlords who kick out store owners of prospering convenience stores to give the space to their relatives or friends.
Experts say the "crisis of self-employed" goes beyond the low productivity of the domestic service industries and is interlocked with a rigid labor market and an underdeveloped industrial structure.
"Korea should restructure its wage system to a ‘leaner and longer' style," said Professor Cho Jun-mo of Sungkyunkwan University. "The legal retirement age has been raised to 60 but the nation can ensure the stability of employment and income only when it successfully implements a peak wage and performance-based pay system." Before wage earners transform themselves into self-employed, businesses need to extend their careers through the peak wage system, he said.
Raising the efficiency of the self-employed is another important task. "The government ought to provide more elaborate vocational training and support for startups so that retired people can make the best use of their lifetime careers instead of jumping into simple menial jobs not related with their aptitudes or expertise," Professor Cho said.
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