Redesigning the Employment System for Generational Balance
The continued employment of older workers may lead to a relative deprivation of job opportunities for the younger generation. For this reason, how to guarantee jobs for both older workers and young people is expected to become an important policy issue. There is a growing call for a redesign of the employment system that takes into account the jobs of both generations simultaneously. Companies believe that, given the decline in the working-age population and the imbalance in labor supply and demand, extending the retirement age is an inevitable choice. However, they also maintain that it is difficult to design a sustainable employment structure without linking it to youth employment.
According to the "Survey on Corporate Status and Institutional Demand Related to Extending the Retirement Age to 65," conducted by Asia Economy through the polling agency Mono Research from April 24 to 29, targeting the top 500 companies in Korea by domestic sales, companies cited "increased labor costs due to a seniority-based wage system" (43.3%) and "reduced capacity for new youth recruitment" (22.7%) as the main burdens if the retirement age is extended. "Personnel bottlenecks and stagnation in job ranks" (16.5%) followed. The results reflect the demand to address not only the livelihood issues of older workers, but also the rigidity of workforce structure and the imbalance of opportunities between generations that arise as a result.
As they prepare for the extension of the retirement age, the issues that companies are prioritizing for review are "adjustment and redesign of the wage system" (34.7%), "reconsideration of workforce allocation" (24.7%), and "developing measures to balance youth recruitment" (13.9%). This indicates that a significant number of companies are considering ways to maintain a wage structure centered on older workers while actively hiring new employees at the same time.
Corporate representatives expressed the opinion that "the timing of implementation through legal institutionalization should be considered carefully," and that "it is necessary to take into account the increased labor cost burden on companies due to the extension of the retirement age, as well as the relative decrease in quality jobs for young people."
Conditions that allow people to work even after retirement age must be established. According to Asia Economy's analysis of the Statistics Korea Economic Activity Population Survey microdata, the number of regular employees aged 20 to 40 with contracts of one year or longer increased from 6,135,000 in 2014 to 6,684,000 in 2024. However, when combining temporary and daily workers in the same age group with contracts of less than one year, the number decreased from 8,404,000 to 8,374,000. If the decline in the youth population intensifies in the future, the labor force will inevitably decrease further.
Experts emphasize that extending the retirement age must not only solve the problem of jobs for older workers but also include the expansion of youth employment as another pillar. Kim Yuseon, Director of the Korea Labor and Society Institute, called for gradual and step-by-step solutions to find a "balance" between continued employment for older workers and youth employment. He advised, "Extending the retirement age, centered on the public sector and large corporations, will inevitably have a negative impact on youth employment unless the workforce size is increased. Considering the reality of these two factors colliding, it is in society's interest to proceed gradually and over time."
In the process of seeking step-by-step solutions, the issues faced by each generation were identified as challenges to be addressed. Director Kim pointed out, "For youth jobs, we need to consider that there will come a point when the supply of young people continues to decrease and cannot meet demand. As for jobs for older workers after retirement age, many are still at the minimum wage level. Therefore, beyond simply extending the retirement age, creating better working environments for them is also an urgent task."
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
