First registered: 2017-08-24;     Last registered: 2020-12-31    

1. Introduction

The preceding article of the author reviewed the US statistics of non-traditional workers in their proportion to employment to see whether it is possible to confirm the trend of corporate labor dissolution by data.^[1] The article covered four kinds of non-traditional labor: part-time workers, self-employed workers, contingent workers, and workers under alternative employment arrangements and used both the official labor statistics of the BLS (Bureau of Labor Statistics) and the other sources. The BLS statistics says that part-time workers show an increasing trend in their proportion to employment, which may be understood as a dissolution of corporate labor. But other BLS statistics do not show such a trend; contingent workers and workers under alternative employment arrangements show a stagnant trend their proportion to the employment respectively for the past two decades and the self-employed show even a declining trend in their proportion to the employment. or even do show the opposite trend for several decades. But contrary to those, other sources of statistics may fit the trend of corporate labor dissolution. The statistics of the US IRS (Internal Revenue Service) for sole proprietors (a similar term as self-employed workers) show a rising trend of them in their proportion to employment. And the statistics of the Freelancers Union and Upwork in joint show an increasing trend of freelancers, similar as workers under alternative employment arrangements though different in definition, in their proportion to employment. The discrepancy between the BLS labor statistics and other statistical sources may come from the difference in measurement. The BLS statistics measure work activities for a reference week of each month while other sources measure them for a year. The latter measurement is more appropriate to capture intermittent work activities happening anytime in a year than the former which is designed to measure labor force for a specific week of every month and to see the rise and fall of labor force across months and so weak in measuring infrequent activities of an individual in a year. Thus the conclusion of the preceding article was that instead of relying on the official labor statistics, other sources of statistics should be consulted and progressive policy arrangements to reflect the trend of corporate labor dissolution should be taken into consideration.

The preceding article looked to this forthcoming article as a companion that reviews Korean statistics regarding the same topic in a similarly framed format as much as possible. But it should be noted that, in spite of similarities of statistics between the two countries, it is not rare that statistical methods are different across the countries and even that comparable statistics are not available across countries. So while this article tries to present corresponding Korean statics as close as possible to the US ones, differences will be noted in each Korean statistics in comparison with the US ones. And only available Korean statistics will be presented and so some statistics of the US may not find their counterpart in Korean statistics, which is particularly the case of measurement of freelancers mentioned above.^[2]

2. Part-time workers and the self-employed: statistics of South Korea

The Statistics Korea releases the EAPS (Economically Active Population Survey) every month which is similarly designed as the CPS (Current Population Survey) of the US.^[3] Statistics for the part-time workers, defined as those working usually hours less than or equal to 36 as in the BLS, are available at EAPS from 1981 and so on except two years 1984 and 1984.^[4] Overall, the proportion of the part time workers to the employed has tended to rise from around 6 percent in 1981 to almost 14 percent in 2018 (Figure 1). The EAPS also makes it possible to see the reasons for part-time work. which can be classified mainly into two types: economic and non-economic and was done by the author; there is a small percentage of part-time workers for unclassified reasons.^[5] According to this classification, the proportion of part-time workers for non-economic reasons tend to rise as similarly as to that of the whole part-time workers and its size is very close to that of the whole part-time workers (Figure 1). On the other hand, the proportion of part-time workers for economic reasons is dwindling within certain bands. Till 1997, the proportions were less than one percent. After then. except for a bump for several years, the proportions are between two and three percent. The Asian financial crisis in 1997 seems to have entailed a structural shift in labor market toward more people having working hours less than desired.

Figure 1. Part time workers in South Korea Sources: EAPS (Economically Active Population Survey), data of part-time workers are retrieved by the author from the microdata available at (mdis.kostat.go.kr). The data of total employment are available both from the KOSIS website (kosis.kr) and the microdata and are consistent with each other. The questionnaire for 1983 and 1984 did not include relevant questions and so no data are available for these two years.

Like the BLS, the Statistics Korea provides three types of employment: wage and salary employees, self-employed (unincorporated), and unpaid family workers. Unlike the BLS, the Statistics Korea does not explicitly define self-employed workers whether they are unincorporated or incorporated but in Korea the self-employed are commonly recognized as unincorporated. Neither does the Statistics Korea provide any data for incorporated self-employed workers, or those who own a corporation as a single owner. Overall, like the US mentioned in the preceding article, the proportion of the unincorporated self-employed to that of the total employed of Korea is declining from around 37 percent in 1963 to around 21 percent in 2018 (Figure 2). But the levels for Korea are still even higher than those for the US which was less than 20 percent in 1948 and has been declining since then. The decline of the proportion of the self-employed of Korea may share a common factor with that of the US: declining number of small farms. The EAPS by Statistics Korea can provide a clue about that since the EAPS also asks the sector that the self-employed belongs to since its inception in 1963. The official DB KOSIS does not provide data about that with respect the self-employed, but the microdata, available from 1981 and so on as mentioned above, makes the information available since 1981.^[6] Indeed, as shown in the figure 2, those self-employed belonging to the farming sector was a little higher than those for the non-farming household in their proportion to the employment in 1981 and has declined up to less than five percent since then. On the other hand, those self-employed belonging to the non-farming sectors had tended to increase in their proportion to the employment up to around between 20 and 25 percent till 2002. Since then, they have tended to decline slightly but are around between 15 and 20 percent. So the declining trend of the self-employed in their proportion to have employment is mostly due to that of the self-employed in the farming sector. But rather high levels of the self-employed in their proportion to the employment well shown as in the self-employed of the non-farming sectors in Korea may need a further explanation such as a late development which still accompanies a not-yet modernized sector.

Figure 2. Self-employed in South Korea Sources: EAPS (Economically Active Population Survey), data of self-employed by sector are retrieved by the author from the microdata at (mdis.kostat.go.kr). The data of total employment and self-employed are available both from the KOSIS website (kosis.kr) and the microdata and data from both sources are consistent with each other.

3. Contingent employment and alternative employment arrangements: the BLS statistics

The supplementary survey for Wage and Salary Employment Position Statistics (shortly hereafter Position Survey) to the EAPS has been deployed annually as of every August since 2001, which examines in-depth questions of work type and workers' attitudes for wage and salary workers. This supplementary survey provides a further detail on non-standard corporate labor. The Statistics Korea classifies wage and salary employees into two subsets: regular and irregular. Regular employees expect that their employment will continue for good and enjoy full benefit packages for employees. So in Korea regular employment means both stability and status in employment. Irregular employment, which is meant to be non-traditional corporate labor by the author's term, can be further classified into three kinds: 'hourly', temporary, and non-standard labor. Data for 'hourly' workers is obtained from the explicit question that contrast 'hourly' work from 'daily' work and 'hourly' and 'daily' work, both as word-to-word translation of Korean concepts, are in concept as similar as part-time and full time work respectively.^[7] But the supplementary survey is limited to only wage and salary workers, while the data of part-time and full time workers are based on the total employment.^[8] Temporary and non-standard employment are respectively close to contingent employment and employment under alternative employment arrangements of the BLS's term. So the statistics for those two kinds of employment will be examined.

Temporary workers in the Employment Position Survey is composed of 'temporary workers of defined terms', the workers who have a contract of a defined term, and 'temporary workers of undefined terms' or ones who have no contract of defined terms and do not anticipate for their job to continue for reasons but for personal reasons. The former concept is excluded in the BLS's definition of contingent workers because the BLS begins with the workers who do not have any explicit or implicit term of contract. The latter concept is very similar to the BLS's concept of contingent workers in its broadest kind dubbed 'broad' by the author in the preceding article, except for the fact that the Employment Position Survey covers only wage and salary workers and so excludes the self-employed (as well as unpaid family members for family business). The narrowest definition of contingent workers, dubbed 'narrow' by the author in the same preceding article, excludes both the self-employed and the independent contractors and so it is even narrower than the definition of temporary workers of undefined terms in the Employment Position Survey where the questions of the term are independent from job arrangements one of whose category is independent.

Though the category of temporary workers of undefined terms is very close to that of contingent workers, the author will present the category of temporary workers of defined terms too. For temporary workers of defined terms are also regarded as employees of under-privileged and uncertain status in Korea, For 2004-2019, likewise in the US case in the preceding article, temporary workers of undefined terms, or contingent workers in the BLS term, do not show any particular direction of up or down in their proportions to employment as well as temporary workers of defined terms (Figure 3). The sizes of workers of undefined terms are between 2 and 4 percent, which are also similar to those of contingent workers of the US as presented in the former article. The proportion of workers of undefined terms to employment tends to increase recently, which may reflect a recent downturn of the economy. Temporary workers of defined terms have sizes around between 10 and 12 percent in proportion to the employment without presenting any particular direction overall. But just in 2019 the proportion suddenly moved upward to around 14 percent, which probably reflect recent economic difficulties raised by various external and internal factors.

Figure 3. Contingent wage and salary workers in South Korea Sources: EAPS (Economically Active Population Survey), data of self-employed by sector are retrieved by the author from the microdata at (mdis.kostat.go.kr). The data of total employment and self-employed are available both from the KOSIS website (kosis.kr) and the microdata and data from both sources are consistent with each other.

Mentioned above, like the BLS's supplementary survey, the Statistics Korea's Employment Position Survey provides statistics for workers with alternative employment arrangements. But there are three differences between the two surveys. First, Korea's survey covers only wage and salary workers, while the BLS's survey obtains the statistics from all the employed.^[9] So the self-employed and unpaid family workers are not covered by the Employment Position Survey. Second, while the BLS classifies alternative employment arrangements into four exclusive types: independent workers, on-call workers, temporary help agency workers, workers provided by contract firms. the Statistics Korea adds one more type who works at home. Third, while the BLS provides statistics for types of workers exclusively from each other, the Statistics Korea provides statistics of each type worker independently from each other; so there might be overlapping between the types. Thus the Statistics Korea counts the number of workers with alternative employment arrangements as the number of workers who may belong to any of the types. Except the first difference, the other two differences can be reconciled by applying the microdata of the Employment Position Survey as mentioned above. From the microdata, the author collected the statistics for each of four type of workers and the statistics for the workers with alternative employment arrangements in general.

The chart of the proportion of workers under any alternative employment arrangements (based on the four types) shows a bump shape with range around between 7 and 10 percent for the period from 2001 to 2019 (Figure 4). The levels are a little lower than those obtained from the BLS statistics (around 10 percent), which may reflect the methodological difference between the two mentioned above: Korea's statistics covers only the wage and salary workers. And the declining proportion is a little similar to the same kind of statistics for the US as shown in the preceding article. Workers provided by contract firms are relatively small around less than one percent and stationary. Independent contractors have tended to decline from around 4 percent to 2 percent. The other two types show bump shapes in their graphs, with on-call workers the largest of the four types. These ranks in their size for the four types of workers in South Korea are roughly similar as those for the US except for independent contractors; for independent contractors, the US is much higher, about 7 percent, than Korea. Since independent contractors may happen to be self-employed, the exclusion of the self-employed in Korea's Employment Position Survey may have resulted in under-estimation of the independent contractors particularly in recent years because those self-employed being independent contractors may have increased recently. Except the independent contractors, the levels of three other types of workers are a little higher in Korea than in the US, which may reflect that Korea's job market is less formalized than the US's as shown in the comparison of the size of the self-employed above.

Figure 4. Wage and salary workers with alternative employment arrangements by type of arrangement Sources: The supplementary survey for wage and salary employment position statistics; data are retrieved by the author from the microdata at (mdis.kostat.go.kr). The data of total employment and temporary workers are available both from the KOSIS website (kosis.kr) and the microdata and the data from both sources are consistent with each other.

4. Tax statistics for sole proprietors

Like the US, South Korea has faced a recent surge of interests in platform workers. But in spite of such interests, unlike in the US, in Korea, there have been yet no serious statistical venture to reflect platform workers and so no comparable statistics corresponding to that of the Freelancer Union and Upwork in joint mentioned in the author's preceding articie. But like the US, South Korea has the statistics of sole proprietors from the tax filing information. The National Tax Service (NTS) of South Korea, equivalent to the Internal Revenue Service of the US, has provided the information of comprehensive tax filing for those who have some significant size of incomes other than labor income. From this information, we get the total counting of individuals of comprehensive tax filing and also the counting of those with each type of income respectively. The sole proprietors of the US presented in the author's preceding article are in concept exactly the same as the individuals of comprehensive tax filing with business income as sole proprietors. But the NTS has provided the counting of the sole proprietors only since 2014. Before 2014, the NTS provided only a counting of sole proprietors and renters in combination. So note that there is a break in the time series of sole proprietors from 2014.

Figure 5 presents selected counts from them: the total counting of individuals of comprehensive tax filing, the counting of individuals of comprehensive tax filing with business income as sole proprietors, and the counting of individuals of comprehensive tax filing with labor income. From Figure 5, we also can see the increasing trend of those three counts in their proportion to employment (employment statistics is from the EAPS as above). Because of the data break, sole proprietors in their proportion to employment dropped in 2014 but have continued to rise reaching 18 percent in 2017. The size of sole proprietors is a little lower than those of the self-employed presented above by about 3-4 percent in 2017. This may be consistent with the fact that some self-employed may not have to fill in the comprehensive tax file.^[10] The increasing trend in sole proprietors is contrary to the decreasing trend in self-employed from the EAPS presented above, which is also the case in the US. Figure 5 also shows that the individuals of comprehensive tax filing with labor income also increase in their proportion to employment. To understand these patterns of data, one hypothesis might be presented that there might be a growing number of wage and salary workers who also do business as self proprietors but report their main job as wage and salary workers in the employment survey, which leads to the underestimation of the self-employed in the employment survey. This hypothesis is also consistent to the fact mentioned in the preceding article that a growing number of people who do business intermittently or as a side job to the main job are not captured into a slit of a reference week of a monthly employment survey but only into yearly statistics for their yearly activities. And the levels of sole proprietors of South Korea are just a little higher (by roughly one percent point) than those of the US. So South Korea and the US are alike in the trend and size of sole proprietors.

Figure 5. Sole proprietors Sources: The NTS of South Korea: Statistical Yearbook of National Tax; data available too at he KOSIS website (kosis.kr); the proportions of those numbers of the employed are calculated by the author by using the BLS's employment statistics. Before 2014, the NTS provided only a counting of sole proprietors and renters in combination. So note that there is a break in time series of sole proprietors from 2014.

5. Conclusion

The Korean statistics presented so far show very similar trends as the corresponding US statistics do so. Part-time workers show an increasing trend both in Korean and in the US in their proportion to employment. On the other hand, the self-employed show a decreasing trend and contingent and other categories of workers show non-increasing or even a little decreasing trends. Also the tax statistics both in Korea and US shows the increasing trend of sole proprietors in their proportion to employment. Though it is sorry for Korea not to have such statistics for freelancers as the US does so, the tax statistics of sole proprietors of Korea support that the measurement of sole proprietors as annual activities fits the trend of corporate labor dissolution. So we can reach a similar conclusion as the one in the preceding article. Also in Korea as in the US, while official labor statistics does not fit to the hypothesis of corporate labor dissolution except in part-time work, statistics to capture activities as in tax reporting in an yearly term does so. So at least the hypothesis of corporate labor dissolution should not be rejected and, given the increasing trend of other types of work, progressive policy arrangements should be seriously taken into consideration. For present labor laws and social institutions that have been placed to fit corporate labor may not help out or even harm workers outside the realm of corporate labor. So recognizing the trends of the dissolution of corporate labor, we'd better change the labor system to accommodate the new trends to allocate economic resources more effectively and to better serve individuals who prefer flexible and independent works.

(*) This article is published in intelligence korea, Summer and Winter, 2020. The Korean version is available at intelligencekor.kr/periodical/article.html?bno=9.

Notes

[1] The article with the title “Institutionalization and dissolution of the twentieth century;s corporate labor”, downloadable at http://intelligencekor.com/kimseokhyeon/article.html?bno=2.

[2] The Statistics Korea considers to introduce a third type of labor for platform labor other than the existing two types of labor: wage and salary workers and the rest made up of the self-employed and family workers.awww.mk.co.kr/news/economy/view/2019/11/996017.

[3] The EAPS began in 1963 with seasonal surveys and expanded to monthly surveys since 1983.

[4] It was not until 1970 (or possibly 1969) that the EAPS had not asked the question of working usually less than or equal to 35 hours. The author made sure from the old archive that 1970 surveys an onward have asked the working hours but had not done so till l1968 but the author could not find the 1969 survey documents. The statistics for the question are not provided either on the internet DB KOSIS or on the printed report. Just microdata which is available at mdis.kostat.go.kr provides relevant information. The microdata is accessible to the public by registration for log-in. In the 1983 and the 1984 survey, there were no questions on usual working hours. In EAPS the questions of working usually less than or equal to 35 hours are mostly filtered to only working people or even those who worked less than or equal to 35 hours in the reference week. The BLS also limits the questions only to those working people but not to those who only worked less than or equal to 35 hours. So the EAPS might have excluded those cases that some people usually work less than or equal to 35 hours but just worked more than 35 hours in the reference week. The author studied these cases when the EAPS for some years asked the 'usual working hours' regardless of the actual working hours in the reference week and confirmed that the number of those people who happen to work more than 35 hours in the reference week but usually work less than or equal to 35 hours is marginal to that of those people who work usually and happen to work less than or equal to 35 hours.

[5] The reasons for part-time work to choose are not presented in the same way for all the yearly surveys but reasons can be interpreted as either economic, non-economic, or unclassified. The economic reason corresponds to one answer “no work available” for all the surveys. The unclassified reasons correspond to open-ended answers for any other reasons not specified. The microdata does not provide details of reasons and so it is not possible to classify further them. The non-economic reason corresponds to the congregation of the all other answer choices except economic and unclassified one. Health, study, and housekeeping are typical ones. Regarding the 'non-economic' reason, it is worth to note that the 1998 survey and consequent ones have added one more reason to choose such as “The regular working time is less than or equal to 35 hours.” This answer may indicate that the 35 cut-off may not be the criteria for part-time work. However the number of people to have chosen this answer is too large for them to be excluded from part-time work and the author's analysis from the supplementary survey for the employed people with salary suggests that those who answered as “The regular working time is less than or equal to 35 hours.” tend to classify themselves as the workers who work shorter than full-time workers. Thus the answer “The regular working time is less than or equal to 35 hours.” should be interpreted just as the steady working schedule for each worker who answered to work usually less than or equal to 35 hours a week. The supplementary survey analyzed by the author is also mentioned in detail in the main text of this article with respect to non-standard labor statistics.

[6] It should be noted that here farming does not only mean agriculture but also fishing and forestry. There are two more question categories to relate the self-employed to farming: whether or not a self-employed belongs to the farming household and whether or not a self-employed reports one's vocation as a farmer. The author traced these two categories of statistics too. The results are quite alike. So the selection of categories does not matter.

[7] The official definition of 'hourly' labor is a little ambiguously defined either as working less than the normal working hours or as working less than or equal to 35 hours. The official definition presumes both definitions the same but the chance of normal working hours less than or equal to 35 hours cannot be precluded. But as commented in note [8] below, both seem to be almost identical in actual data.

[8] The count of 'hourly' workers is smaller than that of part-timer workers, in the definition of working less than or equal to 35 hours, almost by the amount of part-time workers other than salary and wage workers. However, there are a small number of respondents who happen to be part-time workers and to be 'daily' workers, that is, not 'hourly' workers.

[9] The Statistics Korea also provides a complementary survey for other workers except wage and salary employees at the same time every year as that for wage and salary employees. But this survey does not ask about the status of employment contracts.

[10] Some of those who are qualified for comprehensive tax filing are officially exempted to do so in some cases: for example, when their income from extra activities are lower than a certain amount.