South Korea’s Social Co-operatives

From being a poor country in the 1950s, South Korea grew its economy rapidly, to become the 10th largest economy in the world in 2022. While Korea’s government pulled the strings to through a state-led economic development strategy initially, a more neoliberal approach was adopted in the early 1990s as Korea integrated into the global economy. Following economic crises in 1997 and 2008, Korea’s government is now shifting to a new, more inclusive model that embraces the role of the social economy policies.

Laying down the law

Since the global crisis in 2008, South Korea’s legislators have been busily passing laws to strengthen the social economy: the National Basic Living Standards Act (1999), the Social Enterprise Promotion Act (2007), the Village Community Act (2011) and the Framework Act on Co-operatives (2012).

The Framework Act on Co-operatives (FAC) in 2012 ushered in a new form of social co-operatives, to serve marginalised communities. While traditional cooperatives aim to generate economic benefits for individual members through sales and services, social co-operatives specifically focus on a social improvement mission, such as providing jobs for marginalised populations. Social co-operatives must register as non-profit organizations with a goal of at least 40% of all income being dedicated to public benefits and no allowance for the distribution of dividends to individuals.

A surge in social co-operatives

Social co-operatives have been proved a popular model – and one that has grown quickly. There are now 4256 registered social cooperatives trading in Korea, focussed mainly in the fields of child-care and elderly care, transforming the landscape these sectors. According to a report by Korea’s  Ministry of Employment and Labour, social co-operatives as of December 2022 generated 67,000 jobs which provided services to over 6.2 million people, and employment numbers grew by 3,966 between 2021 and 2022.

Dounuri was Korea’s first registered social cooperative, serving the elderly, the sick, the pregnant, and patients needing domestic care. It was originally founded in 2008 as a social enterprise by employees of various self-help centres providing social services. With five founders and four workers, Dounuri created a democratic home care social cooperative where members of the cooperative have equal voice in decision-making processes. Dounuri converted to a social co-operative in 2013, winning a contract with the city of Seoul to operate a nursing facility.

Organisational revenue was 58 billion won ($5.8 million) in 2015 and has continued to grow since, now operating four home care facilities for the elderly alongside six facilities providing social services to city residents: a teaching programme, nurses for new mothers, a nutrition center, general nurses, a social work center, and an emotional care. Dounuri had 915 worker-owners in 2019, and 61 percent of which were low-income individuals when hired. In July 2022, the department of Administration selected Dounuri as the best social cooperative in 2022 in honour of tenth anniversary of the passage of the Cooperative law.

Another example can be found in “We stay Beolnae” Social co-operative, an apartment co-operative with 491 co-op members seeking to create a more affordable apartment complex for low-income communities. Or “Dream We would assemble” for musicians of the disabled people. By hiring disabled musicians of 11 people, the co-operative has 69 members who have performed 80 concerts a year, on average, since its formation in 2015. The parents of the disabled played a critical role in developing a social cooperative and it also received an award as one of the best social cooperatives in 2022.

Purpose beyond profit

In short, a social cooperative is one of the most powerful strategies that can create more job opportunities for the marginalised community. As other countries such as Italy have already used social co-operatives to provide jobs for the marginalised and the unemployed, social co-operatives can also fulfill an important co-operative principle, “concern for the community.”

While traditional co-operatives still play an important role, social co-operatives bring us back to the true purpose of a co-operative – one that goes beyond profit to serve a broader public and the poor, the elderly, the sick and the disadvantaged.

Executive Director of the Rocky Mountain Employee Ownership Center (RMEOC) at RMEOC | + posts

Minsun Ji (Ph.D.) is a labor-community organizer, activist scholar, and popular educator. Currently, Minsun is the Executive Director of the Rocky Mountain Employee Ownership Center (RMEOC), which promotes employee ownership through coop conversion, coop incubation, research, and policy in Colorado, U.S. She is currently launching the Drivers Cooperative-Colorado, a rideshare platform worker cooperative, and helping to launch a platform cooperative for rideshare drivers in other U.S. and international cities with a goal to build the international federation of drivers.

Minsun was the graduate program director of the Center for New Directions in Politics and Public Policy in the Political Science Department at the University of Colorado Denver where she created graduate program tracks in the social economy and community/labor organizing. Minsun organized immigrant janitors, immigrant day laborers and domestic workers and she was the founder and executive director of Denver’s first worker center, El Centro Humanitario para los Trabajadores (Humanitarian Center for Workers). She is a native Korean and recently coauthored a book, Sustainable, Smart and Solidary Seoul (Springer 2023), with Dr. Tony Robinson.