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  • Employment Crisis – Will It Last? 0.28 Jobs Per Job Seeker, Worst Since the IMF Crisis

    Employment Crisis – Will It Last? 0.28 Jobs Per Job Seeker, Worst Since the IMF Crisis

    The employment crisis, driven by a domestic economic downturn, is continuing to worsen. Concerns are growing that, if the economic situation doesn’t improve, the labor market could face a collapse.

    January Employment Overview

    According to the National Statistics Portal (KOSIS), the number of employed persons in January 2024 reached 27.88 million, which is a 135,000 increase compared to the same month last year.

    However, this increase varied significantly by industry. Employment in health and social welfare services saw the largest growth, adding 119,000 jobs. Other sectors like professional, scientific, and technical services (up by 98,000 jobs) and information and communication services (up by 81,000 jobs) also saw notable increases. Most of the growth in health and social welfare services, however, is driven by government financial support, indicating a decline in the overall quality of jobs.

    The large crowd on the subway during rush hour

    A Decline in Job Openings

    In December 2023, the number of new job openings fell by 19.4% compared to the previous year, dropping to 158,227. Among these openings, the number of permanent positions decreased by 26.5%, while temporary positions increased by 7.6%. This shift suggests a growing reliance on temporary jobs over more stable, long-term positions.

    Sector-Specific Employment Declines

    The construction industry experienced a sharp decline in employment, with 169,000 fewer workers compared to January of the previous year. This marks the largest drop since the 2013 industrial classification revision. The construction sector has seen a consistent decline for nine months, with the gap growing each month.

    Manufacturing also faced a downturn, with 56,000 fewer workers compared to January 2023. This marks the seventh consecutive month of job losses in this sector. Similarly, retail employment decreased by 91,000 jobs, continuing an 11-month decline, although the drop in January was slightly smaller than in the previous month.

    Employment in Key Age Groups

    The number of workers in their 40s and 50s also declined. In January, there were 71,000 fewer employed in their 40s and 14,000 fewer in their 50s. This marks the most significant decrease in employment for people in their 50s in 47 months.

    Job Vacancy Rate Hits Historic Low

    According to a survey by the job portal Worknet, the job vacancy rate dropped to 0.28 in January 2024, a significant fall from 0.48 in the previous year. This is the lowest rate recorded since the IMF financial crisis in January 1999, when it was 0.23.

    The job vacancy rate measures the number of job openings relative to the number of job seekers. A lower vacancy rate indicates that fewer jobs are available for each job seeker, confirming the worsening conditions in the labor market.

  • The Collapse of ‘Café Republic’ – Over 12,000 Coffee Shops Closed in a Year

    The Collapse of ‘Café Republic’ – Over 12,000 Coffee Shops Closed in a Year

    South Korea’s once-booming café industry is now facing an alarming downturn. In 2024 alone, 12,242 coffee shops shut down, following a similar trend from 2023, when 12,433 cafés went out of business. This means that, for two consecutive years, an average of 34 cafés have closed every single day.

    Once known as the ‘Café Republic’ due to its overwhelming number of coffee shops, South Korea’s café culture is now at a crossroads. What led to this drastic decline?

    1. The Burden of Rising Labor Costs

    One of the biggest factors behind the surge in café closures is the increase in minimum wage. Higher wages have made it increasingly difficult for small café owners to afford staff, forcing many to either cut hours, operate alone, or shut down altogether. Unlike large franchise chains that can absorb higher labor costs, independent cafés are struggling to survive under the weight of these financial pressures.

    2. The Soaring Cost of Coffee Beans and Supplies

    Global coffee bean prices have skyrocketed in recent years, putting additional strain on café businesses. Beyond beans, the cost of milk, syrups, and disposable cups has also increased, further eating into already thin profit margins. For smaller cafés without the purchasing power of major brands, these rising costs make profitability nearly impossible.

    3. The Rise of Budget Coffee Chains

    The dominance of low-cost coffee franchises has significantly reshaped the market. Affordable brands like Mega Coffee and Compose Coffee have aggressively expanded, offering large-sized drinks at prices that independent cafés simply cannot match. Consumers, facing economic hardships of their own, increasingly prefer these budget-friendly options over artisanal or specialty coffee shops.

    The result? Small cafés are squeezed out of the market, unable to compete with these large-scale operations that benefit from bulk purchasing, streamlined logistics, and aggressive marketing.

    4. Oversaturation: Too Many Cafés, Not Enough Demand

    For years, opening a café was considered a relatively low-barrier business opportunity. With minimal entry requirements, many entrepreneurs rushed into the industry, leading to an oversaturation of coffee shops in every neighborhood.

    However, as competition intensified and costs rose, many of these small businesses found themselves unable to attract enough customers to stay afloat. The harsh reality is that demand simply has not kept up with supply, leading to a natural correction in the industry.

    The Future of South Korea’s Café Culture

    Despite the decline in independent cafés, South Korea’s love for coffee is not disappearing. Instead, the market is evolving. Large franchises, high-efficiency budget chains, and premium specialty cafés catering to niche audiences are likely to dominate in the coming years.

    For small business owners, the era of ‘just opening a café’ and expecting success is over. Only those with strong branding, unique concepts, and financial resilience will be able to survive in this fiercely competitive market.

    The question remains: Will South Korea’s café industry stabilize, or is this just the beginning of a long-term collapse?