[VIEWPOINT]As workers age, we need a plan

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[VIEWPOINT]As workers age, we need a plan

Professor Jeffrey G. Williamson of Harvard University saw that the high-speed growth of some Asian countries, including Korea, since the 1960s resulted from “the gift of a population bonus,” or increase in the proportion of the working population. But he predicted that as the countries enter an aging phase, in which the working population ages and the non-working population increases again, they would have difficulty achieving economic growth.
A report recently announced by the Organization for Economic Cooperation and Development also warned that Korea would become a highly aged society, with more than 20 percent of population over the age of 65 by 2026.
The report said, “As Korea becomes the oldest country from the youngest among OECD members, their shock at the slowdown of economic growth and the aging arising from the decrease in the working population would be beyond imagination.”
The Korea Development Institute predicted that because of the effect of aging, Korea’s economic growth rate would sharply drop to 1.7 percent in 2030. Given the difficulty we are currently suffering despite the achievement of about 5 percent economic growth in 2004, a 1 percent-level economic growth rate will shock us like an earthquake.
Fortunately, many people recently began to feel the need to take measures to address this problem. But they believe that it will only get serious in 10 or 20 years.
This view takes the situation too complacently. Advanced countries have already prepared measures to deal with their rapidly aging populations, but we have not, and we do not have much time to prepare in the future either. Even if measures are prepared, the time gap between their implementation and their effects is very big, unlike other policies. If the situation gets worse, then it is already too late.
What measures should be taken to save the growth engine that can minimize the problems resulting from the collapse of growth as our society ages? Up to now, discussions about the growth engine have been framed in general terms, from the output-centered perspective, such as how to make and foster competitive products or industries. But to relieve the shock that the “agequake” may bring, we need to take a look at the issue from the perspective of the input of production, that is, the supply of human power.
Above all, it is necessary to expand the labor force through the quantitative expansion of the population. Along with taking measures to shore up the currently low birthrate, we should actively seek ways to make use of women, seniors and foreigners as the second and third workforces. For example, reducing the burden of raising children through the expansion of child care facilities can have the effect of encouraging more women to have more children and keep these mothers in the workforce.
As for aging workers, alternative employment such as the wage peak system, under which older employees stay on after the mandatory retirement age but their salaries gradually decrease, and a bridge-employment system should be established so that demand may be created in the labor market and these workers may retire from the labor market gradually.
Also, in the case of foreign workers, we cannot import them immediately even if we need them, and it is also difficult to send them away immediately even if we do not need them. Therefore, we have to formulate a comprehensive measure regarding immigration to Korea before it gets too late.
Furthermore, with the coming of the aging society, what is most important is to replace the end of the “population bonus” with a “brain bonus” through the qualitative improvement of the population. This cannot be accomplished overnight but instead requires long-term measures.
But we should seek ways to improve productivity right away with the present human resources. One idea is to have people work in the most productive jobs through rearranging existing manpower. This is a strategic approach: either choosing or giving up an industry, going beyond simple improvement of efficiency.
The second is improving the productivity of individual economic players to secure excellent customer service and goods. No matter how good a product might be from the suppliers’ point of view, productivity may decrease and their raison d’etre may be questioned if their quality cannot ensure customer satisfaction.

* The writer is a senior managing director at GE Korea and co-author of “The Aging Republic of Korea.” Translation by the JoongAng Daily staff.


by Lee Hyun-seung

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