As baby boomers have begun to retire en masse, the government is pushing to introduce a new system to help them stay in work longer.
Under the proposed scheme, workers aged 50 and older will be given the right to request a shorter workweek, which will involve a corresponding reduction in pay, in order to put off their retirement.
Officials of the Ministry of Health and Welfare say the scheme will not only help baby boomers ― people born between 1955 and 1963 ― stay longer at their current jobs but give them enough time to prepare for their post-retirement life.
Furthermore, the system, if implemented as planned, will also create more job opportunities for young people, they say.
Under the plan, senior workers who want to delay retirement can request a reduction of their work hours to between 15 and 30 hours a week. Management will be obliged to accept such requests unless they cause problems to the normal operations of the company.
A company that accepts requests for shorter work hours may have to hire new workers to take up the slack. But it will receive wage subsidies from the government. The longer it extends the retirement age of its workers, the more subsidies it will receive.
The ministry is planning to have the new system in place next year at the earliest. For this, it has written a bill and consulted the public on it.
While ministry officials are confident that the proposed system can help baby boomers prolong their retirement age and prepare for a new career, critics question its effectiveness and relevance.
They note that Korean companies frequently implement early retirement programs for their employees. For instance, as business conditions worsen these days, a growing number of local corporations are offering early retirement programs for their workers as a means of downsizing their workforce.
In this situation, it is questionable whether the proposed scheme will be effective. A better way to help baby boomers work longer is to force all companies to gradually extend their mandatory retirement ages to at least 60 and introduce a peak wage system.
In fact, this was one of the pledges that the ruling Saenuri Party and the main opposition Democratic United Party both made in the April general elections.
The two parties need to follow up on their election promises without delay, as the proportion of economically active people in the Korean population is forecast to peak this year. This means the demographic dividend that Korea has enjoyed thus far will end this year. It’s time for the nation to take steps as population aging has begun to bite.
