Bus drivers’ triumph is retirement age reminder

Korea was braced for a bus strike last week that would have left commuters helpless in many cities and particularly in Seoul and its suburbs. Through the wee hours of Wednesday morning, negotiations continued.

At 4 a.m. Wednesday morning - just an hour and a half before the Seoul bus drivers were planning to talk off the job - a deal was struck.

Not only did the bus companies agree to raise wages. They also agreed to gradually raise the retirement age of Seoul’s bus drivers from the current 61 to 63 by 2021.

Seoul wasn’t the only place that made that concession. Other cities including Incheon, Busan and Ulsan all agreed to raise the retirement age.

This was the first time that a significant number of companies agreed to extend the retirement age at the same time since the Supreme Court raised the age for which a person can actively participate in physical labor from 60 to 65.

That was in February 2019. The last time the court made such an adjustment was 1989, when the age was boosted from 55 to 60.

“In a situation in which we are short of bus drivers, extending the retirement age is inevitable,” said Kim Joo-young, head of the Federation of Korean Trade Unions. “It’s desirable for both the drivers and also for the companies.”

The triumph of the bus drivers is once again putting Korea’s retirement age in the spotlight.

As the population ages rapidly, more people want to work longer - and there are more older people to fill jobs. The average age of retirement at conglomerates in 2013 was 57.5 years old. As of 2017, it had gone up to 60.2 years old.

Extending the retirement age is a global trend. The United States and Britain have no standard retirement age like Korea. Other European countries like Germany, France and Spain are looking into raising their retirement ages from 65 to 67.

Japanese Prime Minister Shinzo Abe recently said his government will be looking into raising the retirement age from 65 to 70.

“Our workforce is shrinking even after extending the retirement age as the country is suffering from a low fertility rate and an aging population,” said Cho Joon-mo, a Sungkyunkwan University economics professor. “As such, there’s a need for flexible retirement ages according to the nature of the job.”

The state-owned think tank Korea Development Institute last month released a report arguing that there is a need to abolish a standard retirement age to maximize the use of an aging workforce.

The report said the country has to be prepared for yearly economic growth of less than 1 percent 30 years hence because only 36 percent of the population will be responsible for the nation’s overall output.

It said abolishing the standard retirement age will increase the economic participation of people in their 60s or older and also save 126 trillion won ($105.4 billion) in pension payouts for 20 years.

Many Koreans want to keep working.

A survey conducted by Job Korea between April 12 and April 29 found that among 1,128 people, 75.8 percent said they were willing to work even after retirement.

For respondents in their 20s and 30, 70 percent said they were willing to work after retirement. That figure rose above 80 percent for respondents in their 40s and 50s.

Of course, many Koreans worry about life after retiring from their main career because severance payments aren’t that generous and living on the national pension is difficult.

According to a retirement report released by the Hana Institute of Finance last month, the average monthly living expenses for people between the ages of 65 and 74 total 2.1 million won.

Although this is more than the 1.83 million won estimated by Statistics Korea, it was lower than the 2.64 million won that senior citizens told pollsters they needed to cover all expenses, including the costs of leisure and entertainment.

The average monthly national pension payment is 502,000 won. Only 6.7 percent receive more than 1 million won a month.

BY KIM KI-CHAN, LEE HO-JEONG [lee.hojeong@joongang.co.kr]