S. Korean chaebols comprise 84% of GDP but only 10% of jobs

Posted on : 2020-06-14 13:22 KST Modified on : 2020-06-14 13:22 KST
64 conglomerates occupy majority of country’s revenue while adding minimal job creation
S. Korea's 2019 nominal GDP compared to sales voume of 64 conglomerates
S. Korea's 2019 nominal GDP compared to sales voume of 64 conglomerates

The revenues posted last year by 64 of South Korea’s chaebol (family-run conglomerates) accounted for 84% of the country’s gross domestic product (GDP), while only representing about 10% of jobs, a new report finds.

The findings appeared in “An Analysis of 64 Chaebols’ Impact on the Korean Economy in 2019,” a report released on June 11 by Korea CXO Institute, a corporate analysis firm.

These 64 groups included 2,284 affiliates, which posted total sales of 1617 trillion won (US$1.34 trillion). That represents 84.3% of Korea’s nominal GDP last year of 1919 trillion won (1.59 trillion). The analysis covered the 64 groups that the Fair Trade Commission (FTC) declared to have at least 5 trillion won (US$4.15 billion) in assets.

Despite their massive share of sales, however, these companies only represented 11% of the country’s workforce. There were 1.58 million people working for the 2,284 affiliates of the 64 groups, just 11.4% of the 13.86 million people enrolled in employment insurance as of December 2019.

“The chaebols’ job creation impact drops even further if you include self-employed people in the workforce. What this means is that 90% of the country’s workers are employed by non-chaebol companies,” the Korea CXO Institute says.

Total number of employment insurance subscribers compared to job creation by 64 conglomerates
Total number of employment insurance subscribers compared to job creation by 64 conglomerates

The group with the most sales last year was Samsung, which posted 314 trillion won (US$260.6 billion) in revenue, representing 19.4% of GDP. That was followed by Hyundai Motor at 11.5% (185 trillion won, or US$153.5 billion) and SK at 10% (161 trillion won, or US$133.6 billion). Samsung also had the most net profit. Total net profit at the 64 groups last year amounted to 57 trillion won (US$47.3 billion), with Samsung accounting for 19 trillion won (US$15.7 billion), or 34.3%.

“The figures make clear that the chaebols’ impact on the Korean economy cannot be easily disregarded. But the 64 chaebol’s share of employment is lower than their share of revenue, which means they need to more aggressively expand their hiring,” said Oh Il-seon, director of the Korea CXO Institute.

By Song Chae Kyung-hwa, staff reporter

Please direct comments or questions to [english@hani.co.kr]

Related stories

Most viewed articles