Business Groups Express Concern Over Presidential Council's Mandatory Continued Employment Proposal: "Conflict With Youth Jobs"

KEF: "Voluntary Continued Employment is Desirable"
KCCI: "Wage System Reform Must Come First"

Economic organizations have collectively expressed concerns regarding the recent recommendation by public interest members of the Presidential Economic, Social and Labor Council, which calls for a phased obligation for companies to employ workers until the age of 65 by 2033.

On May 8, Lee Sang Ho, Head of the Economic and Industrial Division at the Korea Economic Association, issued a statement emphasizing the need for careful consideration. He stated, "If continued employment is made mandatory without fully taking into account the characteristics of each industry and the management conditions of companies, there is a significant risk that youth jobs will decrease due to a contraction in new hiring."

Lee further noted, "If the practical benefits of mandatory continued employment are concentrated among certain groups, such as large corporations and regular employees, there is a possibility that labor market polarization will intensify. Therefore, in-depth discussions from a long-term perspective are required." He stressed, "To build a sustainable employment ecosystem for older workers, it is desirable to adopt a voluntary approach to continued employment that considers the diverse conditions of the industrial field. In addition, it is essential to first establish a fundamental institutional foundation, including a rational restructuring of the wage system and enhancement of employment flexibility."

Lee Jae Myung, leader of the Democratic Party of Korea, Ryu Jin, chairman of the Korea Economic Association, and other attendees are taking a commemorative photo at the "Democratic Party of Korea-Korea Economic Association People's Livelihood Economy Meeting" held at the National Assembly on the 5th. Photo by Kim Hyun Min

On the same day, Lee Jong Myung, Head of the Industrial Innovation Division at the Korea Chamber of Commerce and Industry, also issued a statement. He said, "The proposal is not to extend the retirement age, but to introduce a new obligation for continued employment contracts. This can be interpreted as evidence of the significant side effects associated with extending the retirement age." However, he expressed concern, stating, "By not guaranteeing the autonomous choice of labor and management, this is essentially the same as extending the retirement age. It will increase rigidity for companies and is likely to cause job conflicts for the younger generation."

He added, "The business community believes it is desirable to ensure that labor and management can autonomously agree on various methods to extend employment. In order for the effective extension of employment for older workers to be realized, restructuring of the wage system must be implemented first."