KWDI Korean Women’s Development Institute

The purpose of this study is to show the descriptive statistics of the female working poor, examine the factors affecting poverty status, and develop the labor market policies of Korea. Female workers differ from male workers in terms of events in life cycles such as child birth, and child rearing, and suffer from labor market iunstability of employment as a result of these life events.  Therefore, it is imperative to design policies that exclusively deal with women workers' issues.

Previous studies have not given much weight to female poverty. The poverty has been measured by household units rather than on an individual level. The commonly used poverty line is based on household income with adult equivalence scales.  Female poverty means poor households where females are the heads of the households who are mostly widowed or divorced. However, followed by the paradigm shift from welfare to work, labor market conditions have become the crucial factor in defining working poor. Women in labor market are known to receive lower wages and unstable job positions, and these conditions are more likely to lead working women to become the working poor.

Methodologies of this study include data analysis using KLIPS and analysis of foreign policies. Poverty is measured by the national minimum expenditure level, and employment status is determined by the conditions of individual economic activities.

The major findings of this study are that 8.8% of economically active men were considered poor in 2004 while 10.5% of women were considered poor. For the working population older than age of 15, 8% of men and 10.1% of women were considered poor which indicates that there is a large number of working poor despite of their long working hours. The working poor were more likely to work in agriculture or manufacturing industries. Particularly, female working poor were more likely to work for retailers and wholesalers as well as for restaurants. 26.8% of female working poor were service workers or saleswomen, which are viewed as less prestigious jobs.

Average single job employment period for the working poor was less than a year, and it showed that employment stability is one of the most important factors for governing possibility of becoming a working poor. The female working poor were more likely to work for small size firms with less than 5 employees.  Surprisingly, the number of female working poor was large in firms with more than 100 employees compared to those with that hired less than 100 employees.  This indicates that the workers with lower salaries in larger firms need to be the major constituencies of the policies.

Unlike the male working poor, marital status influenced the female working poor female working poor were more likely to be widowed or divorced. Education and age were crucial factors that determined working poor, as the less educated and the old were poor even if they worked. Since life expectancy for women is longer than men, working poor prevention policies should be designed with more emphasis on women than men.

Dynamics of poverty of workers are particularly important. We analyzed four groups that were categorized by job loss and/or poverty. As shown in the graph, employment decreased the proportion of the poor, but job instability influencd the chances of becoming poor.

During five years, the working poor group was more likely to become self-employed or have one-day jobs. The group with continuous employment but considered poor, occasionally include full-time employees in manufacturing, retail and wholesale and restaurant industries, which are known as the low-paying jobs. The group of people who were discrete working poors was more likely to be young high school graduates.

The foreign policies regarding these issues were different from that of Korea in terms of the structures of social welfare system as well as labor market policies. The fundamental policy on social welfare for the entire population of Korea is called the National Basic Livelihood.  This safety net decides minimum wage and unemployment insurance system for the workers who are poor. However, not all workers benefit from these two policies, particularly those who have unstable jobs. This indicates that people with higher chances of becoming poor may not be able to exercise the benefits of national welfare policies for workers. Both the welfare in the US as well as the combined welfare system of EU are designed to minimize the number of people who are excluded from the policies using serial policy interventions for the target groups.

The results suggest which group of workers should be the targets of policies for working poor. Offering more number of stable jobs for women is important. Job stability is the key factor in determining working poor, particularly for young women.  The policies should be focused on the self-employed who earn low income. There is no social safety net for them but a basic welfare program shoule be designed for everyone.  Due to a high portion of the self-employed in the Korean labor market, a large number of workers are excluded from the relevant policies. Another policy issue is a need to highlight low waged workers particularly in manufacturing, retail and wholesale and restaurant industries.  In addition, social welfare systems that are based on household levels should be extended to individual levels.

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