Keep older workers on job

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Keep older workers on job

The government needs an institutional strategy to address the problem of poverty and declining economic activity among senior citizens in a rapidly aging society, which has been a negative influence on economic growth, according to a report yesterday by the Korea Institute for Health and Social Affairs.

The report said a system that would allow experienced older people opportunities to work longer could reduce government spending on welfare.

It further stated that many Koreans retire between the ages of 53 to 56 and will soon experience financial trouble because of the country’s unsatisfactory retirement programs.

It said about 72 percent of people aged 50 and older are either self-employed or hired by their own families without getting paid, while only about 18 percent of them are regular employees.

It said that the number of regular employees declines rapidly after the age of 60 and only about 7 percent of 70-year-olds are regular employees.

The poverty rate among older Koreans is the worst among 34 OECD nations, steadily increasing from 44.6 percent in 2007 to 47 percent in 2009 and 48.6 percent in 2011.

As more elderly citizens suffer financial hardships, the government spends more on such welfare programs as health insurance subsidies.

The report said the total medical expense by older Koreans in 2012 was 16.38 trillion won ($15.4 billion), which represented 33.3 percent of the nation’s total health care spending of 48.23 trillion won.

It added that the per capita expense for senior citizens in 2012 was 2.93 million won, up 2.5 percent from 2011, and it has been increasing every year since.

The report also pointed out that encouraging senior citizens’ involvement in economic activity has the dual benefit of boosting the overall economy and improving individuals’ lives physically and financially.

As a result, the government could invest resources that used to go to welfare programs in creating more jobs and improving the overall industrial structure.

The key to making more senior citizens involved in economic activity is to allocate suitable positions for these older, experienced workers who led the country’s economic growth from the 1960s to the early 2000s.

That could increase the number of people in the work force and eliminate - or at least reduce - a drag on growth.

According to a study conducted by the institute, the number of economically active people aged 15 to 64 is predicted to peak at 37.04 million, or 72.9 percent of the population, in 2016, but the number will hit 21.87 million people in 2060. According to the institute, that will happen even though the 65-and-older Korean population will more than triple from 5.45 million in 2010 to 17.62 million in 2060.

The report said such moves also could help senior citizens live happier lives.

According to a study on the happiness of older Koreans conducted by the Hyundai Research Institute in 2013, the biggest worry for people in their 50s and 60s was their quality of life after retirement (20.3 percent) and high inflation (18.5 percent).

It also pointed out that creating an environment where people could work longer in their field of experience would ease such worries and also contribute to making them happier by allowing them to maintain many of their relationships.

Wrapping up the study, the report suggested that putting off retirement for regular employees or introducing a work-sharing program - an employment arrangement where two workers are typically reserved on a part-time or reduced-time basis to perform a job normally fulfilled by one person working full time - is better than making them to find a bridge job, a temporary position that a worker might take at the end of a full-time career.

The report also suggested that the government provide job training programs for retired job seekers in accordance with their education and experience and long-term jobs for income security.

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