Lee Jung-kuen, chair of the Korean Senior Citizens Association, said in his inaugural address on Monday that he will propose that the government raise the official age at which people are considered senior citizens from the current 65 to 75.
The minimum age is used for senior citizen welfare benefits, including free subway rides, free vaccinations and the basic old-age pension.
Noting that Korea’s senior population is expected to double from the current 10 million to 20 million by 2050, he said it is necessary to raise the old-age threshold by one year annually over a 10-year period.
The official age at which people are considered senior citizens was set under the Welfare of Senior Citizens Act, enacted in 1981. The senior citizen age standard established 43 years ago is outdated. Life expectancy at that time of the enactment was 66, whereas now it is 83. The proportion of seniors in the total population has expanded from 4 percent to 19 percent.
The Ministry of the Interior and Safety said Monday that it will extend the retirement age of janitors working for the ministry and its affiliated institutions from the current 60 to a range of 63-65. The ministry said it is considering applying the raised retirement age to other public officials later. At present, about 2,300 janitors deal with cleaning and repairs on a contract basis with the ministry.
Employees born in 1969 or later are supposed to start receiving the national pension at 65. If the statutory retirement age is maintained at 60, they will have to work more to bridge the five-year gap with no income. The ministry’s step is a good occasion to consider raising the retirement age.
With rapid aging underway in the country, it looks inevitable to adjust the official age for considering people senior citizens and extend the statutory retirement age.
According to Statistics Korea, those aged 60 and older emerged last month as the largest age group of the nation’s total employee population, with 6.75 million seniors working. Senior citizen employment in September was the largest ever. Employed seniors outnumbered workers in their 50s for the first time.
The growth of the older workforce is basically attributable to an aging population. South Korea will be a super-aged society next year, with the share of people aged 65 and older in the total population exceeding 20 percent.
In general, companies oppose extending the retirement age uniformly and irrespective of competence for job performance and productivity.
In 2021, the monthly wages of workers employed continuously for 30 years or longer at Korean companies were 2.95 times more than those of people employed for less than a year, according to the Korea Enterprises Federation. The gap was the widest among the 17 countries that the federation researched. Japan marked 2.3 times more and Germany 1.8 times greater.
The disparity can largely be contributed to a seniority-based wage system. Unless wages rise moderately, it would be hard to reduce the financial burden of extending the retirement age. Not only wages, but also indirect labor costs, such as employees' severance pay, are burdensome. More concerning is that extension of the retirement age will likely be an obstacle for young people’s entry into labor market. In-depth discussion of this problem is needed.
The supply of jobs for older people still falls short of demand. The government created 1.03 million jobs for seniors this year, but they met just 45.9 percent of demand, according to the Korea Labor Force Development Institute for the Aged. Many older people still want to work.
Also, a lot of older people unprepared for their later lives are looking for jobs. South Korea’s senior poverty rate is the highest in the Organization for Economic Cooperation and Development. Livelihood subsidies to poor seniors are very limited. Jobs do not just help seniors ease their poverty, but also help the country avoid the demographic crisis caused by the low birth rates and rapidly aging population.
In 2015, the association aroused public debate on the old-age threshold by proposing the senior age be raised to 70. But it remains unchanged over the past nine years. The aging population is not an issue that can be put off any longer. It is time to start the discussion again in earnest.
