Chaebol and the Turn to Services: The Rise of a Korean Service Economy and the Dynamics of Self-Employment and Wage Work

Abstract

This article examines the growing insecurity for the Korean self-employed who were once responsible for a large proportion of domestic service operations. Since the 1980s, changing regional and domestic economic circumstances, the restructuring of regional and chaebol manufacturing operations and liberalisation of the domestic service economy had led to enterprise diversification into the distributive sectors and the systematisation of the domestic service economy. Conducting a historical analysis of service sector development and decomposing the Korean Economically Active Population survey (1989-2011), this article charts the process of Korea's distributive sector development and its effect on the self-employed. It argues that chaebol systematisation of Korea's service sector consolidated the domestic economy after 1997 and exerted pressure on the country's self-employed. Large businesses formalised the service sector, displaced the self-employed, and instead generated mostly non-regular wage work, proletarianising a significant segment of the service workforce.