[Sisibibi] Entering a Super-Aged Society Is Not Just an Issue for the Elderly

Starting next year, South Korea will enter a super-aged society. This is an era where the elderly population aged 65 and over exceeds 20% of the total population. Last year, the elderly population was about 9.5 million, accounting for 18.4% of the total (Statistics Korea, 2023 Elderly Statistics). This number is expected to surpass 10 million this year.

Entering a super-aged society signifies a deepening of economic polarization. Based on disposable income, the proportion of elderly people living in poverty among the total elderly population is about 45.6% (Ministry of Health and Welfare Social Security Administrative Data, 2024). The poverty rate for the early elderly aged 60 to 69 is 35.0%, and the poverty rate increases with age. Among those aged 80 and above, more than half (56.5%) fall into poverty.

On the other hand, some are taking advantage of the current sluggish real estate market to gift apartments to their children. This year, among those who gifted collective housing, more than 3 out of 10 (37%, Woori Bank Real Estate Research Lab) were aged 70 or older. This figure has been gradually increasing after surpassing the 30% range last year. Since gift tax is calculated based on property value, the tax burden decreases as market prices fall. Some analysts interpret this as elderly multi-homeowners engaging in 'wealth inheritance' during a period of declining housing prices.

Next year, this polarization is likely to become more severe. People born in the 1960s will enter the super-aged group aged 65 and over. This generation accumulated assets during the period of economic growth but experienced crises such as the 1997 Asian Financial Crisis, the 2003 credit card debt crisis, the 2008 subprime mortgage crisis, and other financial crises. They are defined as the generation in which 'the rich get richer and the poor get poorer' became fully entrenched (Kim Kyung-rok, The 1960s Generation is Coming / ViaBook). The polarization within this generation is likely to spread to the elderly population as a whole.

Among them, for salaried workers, the income gap between those who have exited the labor market and those who remain is rapidly widening, potentially deepening the rich-poor divide. Similarly, for business owners, as they age, many become non-profitable or small-scale operators, and the ratio of closures to startups (161% for those aged 70 and over, 2011?2020, Statistics Korea) increases, suggesting a similar trend. The sharp rise in real estate prices in 2020 also significantly increased rental income for the elderly who invested most of their assets in real estate, which may further stimulate polarization. Research based on Statistics Korea’s future population projections indicates that as the pace of aging accelerates, income inequality among households is also likely to worsen (Son Min-gyu, Research Fellow at the Bank of Korea Economic Research Institute, 2021).

In this context, the elderly-related pledges presented by the People Power Party and the Democratic Party ahead of the general election are disappointing. While both parties have proposed elderly welfare policies focusing on making nursing care expenses covered by health insurance and providing free meals at senior centers and welfare centers, there are no measures to resolve economic polarization or address elderly poverty. The pledges are filled with 'handout'-style promises rather than thoughtful policies for a super-aged society. Although the elderly vote is important, these pledges fail to truly consider their lives.

At least, the government’s plan to expand jobs for elderly people who collect recyclables and increase elderly employment to 10% of the total elderly population by 2027 is encouraging. However, concerns remain regarding both the quantity and quality of these jobs.

Entering a super-aged society is not just a story about some elderly neighbors. It is a problem that will affect all of us within a few years. We must not forget that economic polarization among the elderly will lead to a deepening rich-poor divide throughout society.