[The Era of 10 Million Elderly]⑩ Korean Elderly Work the Most Among Developed Countries but Are the Poorest

Elderly Employment Rate Rises from 28.9% to 36.9%
Poverty Persists Despite Working..."Wages and Income Are Low"
"Need to Increase Elderly Jobs and Improve Pension System"

South Korea's elderly poverty rate is the highest among the member countries of the Organisation for Economic Co-operation and Development (OECD). At the same time, the employment rate of seniors aged 65 and over is also among the highest in OECD countries. This means that although many elderly people are working, they are still unable to escape poverty. Experts point out that the government should implement various measures to combat elderly poverty, such as improving the basic pension system to ensure a stable old age, expanding quality jobs for seniors, and raising the retirement age.

"Working but Poor" Elderly Employment Rate and Elderly Poverty Rate Both 'Highest'

The number of 'working elderly' has been steadily increasing. According to the 'Elderly Survey' conducted every three years by the Ministry of Health and Welfare, the employment rate of seniors aged 65 and over (the proportion of elderly people engaged in income-generating work) rose from 28.9% in 2014 to 30.9% in 2017, and 36.9% in 2020. The '2023 Elderly Statistics' released by Statistics Korea also show that the employment rate of seniors aged 65 and over was 36.2% in 2022, up 1.3 percentage points from 34.9% the previous year, and 6.1 percentage points higher than 10 years ago. When comparing OECD member countries, South Korea's proportion of working elderly stands out even more. Statistics Korea explained that the average elderly employment rate among OECD countries in 2021 was 15.0%, and South Korea had the highest rate among countries exceeding this average. Following South Korea, countries with high elderly employment rates included Japan at 25.1%, Sweden at 19.2%, and the United States at 18.0%.

Despite working the most among developed countries, Korean seniors are the poorest. In 2020, the income poverty rate of the population aged 66 and over in South Korea (the proportion of people whose average income is less than 50% of the median household disposable income) was 40.4%, the highest among OECD member countries. Unlike seniors in Nordic countries with well-developed pension systems, 93% of Korean seniors rely on 'living expenses provided by themselves or their spouses (Statistics Korea),' meaning they must depend on their own assets or labor even as they age. However, looking at the types of jobs and hourly wages, the reason for being 'working but poor' becomes clear.

One in Two Employed Seniors Works in 'Simple Labor'... 42,000 Seniors Collecting Recyclables

According to the Ministry of Health and Welfare's Elderly Survey, one in two employed seniors works in 'simple labor.' In 2017, the occupational distribution of employed seniors was highest in simple labor at 40.1%, followed by skilled agricultural, forestry, and fishery work at 32.9%, and service and sales at 10.8%. By 2020, the proportion of simple labor increased to 48.7%, and service and sales also rose to 16.9%, while skilled agricultural, forestry, and fishery work dropped significantly to 13.5%. There were also wage differences. According to the Ministry of Employment and Labor, the hourly wage of workers aged 60 and over last year was 18,901 KRW, which was 3,750 KRW less than the overall average of 22,651 KRW. The disposable income of seniors was only 68.0% of the average for the entire population, and within this, the annual disposable income of non-poor and poor seniors was 17.97 million KRW and 8.04 million KRW respectively, showing a large gap. The Gini coefficient for disposable income among seniors was 0.376, higher than the 0.331 for the entire population, indicating that income inequality among the elderly is more severe than in the general population.

The case of 'seniors collecting recyclables' vividly illustrates the poverty of working elderly people. The Ministry of Health and Welfare conducted the first-ever 'Survey on Seniors Collecting Recyclables' earlier this year. There are 42,000 seniors aged 65 and over who collect recyclables, working an average of 6 days a week and 5.4 hours a day, earning 159,000 KRW per month. Calculated hourly income is 1,226 KRW, which is only 12.7% of this year's hourly minimum wage of 9,620 KRW. The main reason for collecting recyclables was 'to cover living expenses' at 53.8%, followed by 'needing pocket money' at 29.3%.

Professor Park Young-ran of the Department of Silver Industry at Gangnam University said, "A significant portion of the elderly currently cannot sustain their livelihood on pensions alone, so many return to work after retirement. As a result, the elderly employment rate continues to rise, but because wages and income are low, it is difficult to call this stable reemployment, and they remain unable to escape poverty."

To address this issue, the Ministry of Health and Welfare plans to increase the number of jobs for seniors from 883,000 last year to 1.03 million this year, an increase of 147,000 jobs, and has allocated a budget of 2.0264 trillion KRW. This increase rate (31.6%) is the highest among budget items for the elderly. The monthly pay for public interest activity-type jobs, such as volunteering at childcare facilities, was raised from 270,000 KRW to 290,000 KRW, and for social service-type jobs, such as public administration support, from 713,000 KRW to 761,000 KRW.

"Super-Aged Society Requires Raising Basic Pension and Retirement Age"

Experts point out that the fundamental solution to elderly poverty lies in improving the pension system. The Public Deliberation Committee under the National Assembly's Pension Reform Special Committee has expressed various opinions regarding the scope of basic pension recipients, including maintaining the current standard of the bottom 70% income group and gradually narrowing the recipient base with differentiated benefits. For now, the government has announced plans to raise the basic pension to 400,000 KRW per month by 2027 under the current system.

Professor Park argued, "Active measures are necessary for impoverished seniors in economically vulnerable conditions. Currently, the basic pension provides 323,180 KRW each to the bottom 70% income group, but it would be better to give 700,000 KRW to the bottom 30%." Conversely, there are suggestions for reforms based on 'pay more, receive more.' Professor Kim Yoon-tae of the Department of Sociology at Korea University said, "Even though the elderly employment rate is high, many elderly jobs are low-wage, and too many seniors do not receive pensions. I believe the scope of basic pension recipients should be raised from the current 70% to nearly 100%." He added, "Raising the basic pension is the most urgent task. Although it requires enormous resources, reforms based on paying more and receiving more are essential to reduce elderly poverty."

With the advent of a super-aged society, the need to raise the retirement age is also being raised. According to a recent elderly survey released by Daegu City, the 'age seniors consider as elderly' is 70.3 years, and the 'desired retirement age' is 76.3 years. However, the retirement age perceived by office workers is 53.4 years (JobKorea and Albamon survey). Currently, the National Assembly's Pension Reform Special Committee is discussing raising the mandatory National Pension enrollment upper age limit from 59 to 64 to align with the pension benefit start age of 65, giving more weight to raising the retirement age.

Professor Kim said, "The retirement age in South Korea is relatively young. Raising it significantly at once could impose a heavy burden on companies, so it is necessary to extend the retirement age gradually, for example, by delaying it by one year every two years." He added, "Preventing capable workers from working is a social waste. It is necessary to reach social consensus and institutionalize this."

Professor Park also said, "Our government defines the working-age population as 15 to 64 years old, but this is very disconnected from the reality where 36% of those aged 65 and over are working. In a super-aged society, 'guaranteeing the right to continue working' is more important than anything else."