Jae-Hyung Jeong Economic and Financial Managing Editor
The Presidential Transition Committee officially announced on the 1st that extending the retirement age is necessary to respond to the era of low birth rates and aging population. Accordingly, the Yoon Suk-yeol administration is expected to pursue a plan to extend the statutory retirement age, currently set at 60, to 65.
Personally, I think this is really good. Reporting and writing can be done even at an older age. As long as one continues to absorb new knowledge and experiences, their expertise will shine even more, allowing them to contribute to society accordingly.
However, I oppose the extension of the retirement age. Most people oppose it because it burdens companies and shrinks youth employment. But a more important reason I want to argue is that it does not align with the "fairness" that President-elect Yoon emphasized so much. Even if the retirement age is extended, the benefits will practically go only to the vested interest groups in our society, such as public officials, public institutions, and regular employees of large corporations with strong labor unions.
According to Statistics Korea, the number of non-regular workers increased by 640,000 to 8,066,000 in 2021 compared to the same month the previous year, and the proportion of non-regular workers among wage workers rose by 2.1 percentage points to 38.4%. In a situation where nearly 40% are non-regular workers, extending the retirement age benefits only the 60%. What about the remaining 40%?
Moreover, as of 2020, the union membership rate was only 14.2%. Companies with unions are more likely to uphold the retirement age, but workers in companies without unions cannot expect retirement age guarantees.
For these reasons, although the legally set retirement age is 60, the actual retirement age is 49.3 (as of 2021). The actual retirement age is based on Statistics Korea’s survey of people aged 55-64 who quit their longest-held jobs, and only 7.5% of those quit due to retirement age. Business downturns, suspension of operations, and closures accounted for 33.0%, and voluntary resignation, honorary retirement, and layoffs accounted for 12.2%, meaning nearly half were forced retirements.
Due to low birth rates and aging populations, many countries have faced labor shortages. The general solutions are, first, to bring women into the labor market and utilize them to the fullest; second, to utilize older workers; and third, to utilize foreign workers. The reason foreign workers are mentioned last is because of competition for good jobs, potential cultural conflicts, and the possibility that low-skilled refugees and others may cause social problems.
However, South Korea has a strength different from Europe or Japan. The world’s youth prefer Korea because of K-pop and Hallyu (Korean Wave). When talking with company people, they say it is not very difficult to hire young overseas people who speak Korean. Many young people who like Korea come not only from the US, Europe, and Latin America but also from the Middle East. Young people who study Korean and come to Korea are on a different level. Competition for good jobs is something to be endured in a labor shortage situation.
Also, we need to consider what to set as South Korea’s long-term vision. As of 2020, the birth rate was 0.8, the lowest in the world. Economic reasons such as "insufficient income or assets" exist, but sociocultural reasons like "my own life is more important" are greater. South Korea’s birth rate will be difficult to improve going forward. If this continues, the aging ratio will increase much faster, and the population will gradually decrease.
I believe it is more desirable to accept more excellent foreign workers and improve immigration systems so they can settle with their families than to extend the retirement age. South Korea’s future vision should be to create conditions where many young people from overseas want to come and live, becoming a more open, tolerant, and inclusive country.
PS. There is a KBS2 TV program called "Neighbor Charles." It makes us realize that so many foreigners live around us and shows that we can coexist well with unfamiliar foreigners. I take this opportunity to pay my respects to the production team of "Neighbor Charles."
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