Time to discuss the retirement age

Lee Sam-sik
The author is a professor of public policy and head of the Institute of Aging Society at Hanyang University.

“Experience is a national asset” is the slogan in Finland used to promote the hiring of older people. In Korea, however, experience is not valued. Workers with deep experience exit the labor market every year because of retirement age. Those between 60 and 64 are neither part of the working generation nor senior citizens, while those aged 65 to 69 are still healthy yet suffer age discrimination. Because of their age, they remain on the periphery of the labor market and at the edges of social security and become mentally and physically exhausted.
When people say the “age of centenarian” — and they actually live to be nonagenarians — society still operates based on a 70-year lifespan. When people finish education in their 20s and labor in their 50s, the unstable elderly period is too long.

In contrast, Germany and Japan already extended the retirement age to 65 and plan to raise it to 67 and 70, respectively. The United States and Britain have abolished retirement age. Japan raised required retirement age to 60 in 1998, when senior population accounted for 16 percent of the entire population, and made it obligatory to hire people at age 65 in 2004 when elderly population was 20 percent. Japan also fixed its retirement age at 65 in 2013 when senior population was 25 percent. By 2025, when employment is guaranteed to 65, 30 percent of Japan’s population is expected to be seniors.

The productive population has already started to decline in Korea, and the percentage of the aged in the population is rapidly growing. When the retirement age of 60 was legislated in 2016, the senior population was 13 percent, but it is expected to grow to 20 percent in 2025, 25 percent in 2030, 30 percent in 2036 and 40 percent in 2051. If the trend continues, Korea is expected to be the oldest country in the world. Therefore, Korea may want to consider not just extending retirement age but also scraping it.

[LEE JUNG-KWON]

Realistically, it is unlikely that retirement age will be extended considering the internal and external environments and labor market conditions. With the introduction of a 52-hour workweek and minimum wage hikes, a retirement age extension will increase burdens on employers and affect hiring of the young people. There are concerns of increasing generational discord. Automation and relocation of manufacturing bases due to the fourth industrial revolution could also aggravate the “employment cliff.”

In fact, extending the retirement age will take a long time, as various social entities must reach a consensus. The situation will be very different in 2030, when the labor shortage begins and the production population decreases. By then, companies will naturally accept extending the retirement age to secure the workforce. Of course, it requires reorganization of the wage system based on work type and performance instead of age in addition to reforming how work is done.

Social entities need to participate in the discussion with progressive attitudes to reach a consensus based on the crucial goal of attaining sustainable social progress and an enhanced quality of life in the aging society. Young people will become old, and when older people work longer, they will be healthier and pay insurance premiums and tax instead of taking benefits. There should be support and the understanding that working seniors will lessen the burden facing the younger people.

For example, in Japan, securing employment for older people did not negatively affect youth employment. Workers need to acquire innovative skills through life-long education. Companies should improve the working environment and methods to effectively utilize the expertise and insight of older workers by accommodating age and physical and mental conditions and develop human resources through education and training.

Politicians should not recklessly push or oppose the retirement age extension for votes or party interests. For a soft landing in the aging society, a discussion of the retirement age should not be delayed.

Translation by the Korea JoongAng Daily staff.