Business struggles force growing number of Korean entrepreneurs to work second jobs

A utility bill is wedged between the doors of a shuttered business in Seoul’s Myeongdong neighborhood in July 2024. (Yonhap)

Lee, a 35-year-old who runs a company that makes promotional products for businesses on his own, also spends his spare time working as a freelance designer. After clocking off from his day job, he spends his evenings devising product packaging for small businesses or designing online shopping sites.

“Hearing stories about business owners in my neighborhood closing shop because they’re short 3 million or 5 million won hits a little too close to home. Demand comes in waves, but I have to pay fixed costs like rent for my office even during the off-season,” Lee said. “Even if it’s physically exhausting, I have no choice but to take on these side gigs.”

While the number of self-employed individuals rebounded for the first time in three years, data shows that at least 190,000 business owners are holding down more than one job. In particular, the number of self-employed business owners who have employees and who have side gigs has increased by more than 30% compared to last year. 

As youth unemployment and other labor market challenges persist, the government is promoting entrepreneurship as an alternative. Critics warn, however, that this risks creating more self-employed people without viable businesses. They say the government must focus not only on expanding the number of entrepreneurs but also on ensuring their businesses’ long-term viability and growth.

An analysis of the economic activity microdata provided by the Ministry of Data and Statistics on Sunday found that 193,000 of the 5.784 million self-employed entrepreneurs reported having a side job in addition to their main occupation as of August 2026. 

Among them, 169,000 of the 4.303 million entrepreneurs who were own account workers — meaning that they had not hired any paid employees — were juggling two jobs. Although this represents a 5.6% decrease from 2025, four out of every 100 (3.9%) were running businesses while holding down a second job. 

When it came to entrepreneurs who did have employees, 24,000 out of 1.461 million were working two jobs, a 30.2% increase compared to 2025 (18,000). Considering the cases not captured in the official statistics, the actual number of self-employed people juggling multiple jobs is likely much higher than the data suggests.

“Cases in which a person engages in two or more forms of non-wage-and-salary work are not considered side jobs,” an official from the Ministry of Data and Statistics said. In other words, for a self-employed individual with more than one job to be counted in these statistics, their second job must be in the form of wage labor, where a monthly salary is received. 

However, if the individual works in sectors like delivery or designated driver services, or as a freelancer, that is classified as another form of self-employment. Therefore, it does not qualify as a “side job” in the official statistics. 

Lee runs his own business while also freelancing, meaning his case is not included in the official data. 

“Since people are freelancing in the time they have to spare while running their own company, most people I know don’t take on regular jobs as side gigs, but do more freelance work,” said Lee.

The biggest reason that self-employed entrepreneurs are forced to take on more jobs is that they simply aren’t making enough money. According to microdata from the Data Ministry, as of the first half of this year, households headed by self-employed people who do not employ others earned an average of 3.115 million won per month in business income, 642,000 won less than their average expenditure of 3.757 million won.

Even self-employed workers with employees fell short, earning 5.663 million won in business income against household expenditures of 5.713 million won. In other words, income from self-employment alone is insufficient to cover living expenses, taxes and interest payments. 

“In Korea, many people start their own businesses in low-value-added service sectors, for example, opening their own restaurants, after retirement. These sectors are highly competitive and are not very productive. Since it is difficult to earn enough, some end up taking on second jobs,” said Yang Jun-sok, an associate professor of economics at the Catholic University of Korea. 

Despite this being the case, the number of people reluctantly opting for self-employment or rushing into starting businesses without making adequate preparations continues to grow.

The results of the supplementary survey on non-wage-and-salary workers released by the Data Ministry on Wednesday show that the number of self-employed workers stood at 10.9 million in August, up 109,000 (1.9%) from 2025, marking the first rebound in three years since 2023. 

However, nearly half (47.0%) of those who had started their businesses within the past year had spent less than one to three months preparing, while more than one in three (35.2%) had launched their businesses with less than 5 million won in startup capital.

One in five (21.7%) said they had gone into business because they had difficulty finding wage employment. All three figures increased from the previous year. 

As the government seeks to build a society with more self-employed entrepreneurs, experts say it must also revitalize the labor market and create more quality jobs while pursuing meaningful structural reforms to boost the productivity of self-employed businesses.

“Even when someone starts a business with a small amount of capital, closing it down without recouping that investment can make it difficult for them to get back on their feet for various reasons. Rather than focusing solely on the quantitative growth of entrepreneurship, we need to consider how well-prepared and competitive new businesses are to ensure that entrepreneurship develops on a sound footing,” said Lee Jung-hee, an economics professor at Chung-Ang University.

“Three factors — necessity-driven entrepreneurship, limited use of digital technology, and small business scale — are compounding to create structural barriers to improving the performance of self-employed businesses,” said Ahn Suzie, an associate research fellow at the National Assembly Futures Institute who has studied the conditions of subsistence-oriented self-employed workers.

“Policy focus needs to shift away from encouraging business startups to providing financial support toward improving business infrastructure and operational systems,” she said. 

By Shin Min-jung, staff reporter; Park Su-ji, staff reporter