An uncharted pathMy college schoolmate “L” is typical of the so-called 386 generation, South Koreans born in the 1960s who went to university in the 1980s and came into their 30s the following decade. It was the first generation to grow up in a fast-modernizing country and who got caught up in the democracy movement and protests against injustice and corruption. In their college days, students spent more time on the streets demonstrating than in lecture halls. They were more adept at ways of aiming stones at riot police than cracking textbooks.
The economy was strong. When it was time for them to graduate, they could choose from a pile of job choices laying around at their campus career counseling office. Careers ran smoothly. The economy was at its peak thanks to the “three lows”: interest rates, the exchange rate and oil prices. The 386ers were true to their namesake - the Intel 386 microprocessor - in their power and dynamism during the elections in the 1990s that brought about generational and ruling power changes on the political landscape.
They were affected by the Asian financial crisis in the late 1990s, but somehow came out intact. Their luck finally ran out last year. To cope with a rapidly aging society, the government introduced guidelines to companies employing more than 300 people to extend the retirement age to 60 from 2016. Workers in their 50s who had thought their jobs were secure until retirement were advised to resign.
When he retired well before the age of 60, my schoolmate did not look too worried. He had a home in a southern Seoul neighborhood and pocketed a handsome severance payment on top of incentives for early retirement. He thought he was better off than his father, who had died in his mid-70s. The first month out of work was a dream. But he began to get nervous upon checking his bank account. His retirement fund of 300 million won ($277,000) generated a monthly yield of 465,300 won after taxes. His home is hardly a cushion, as real estate prices have long been in the deep freeze. He does not have a decent private pension or insurance because he spent all his salary to educate his two daughters. He has to wait eight more years to get any payment from the national pension scheme.
After this reality check, he made the rounds with his resume. He realized why there had been so much hype around a recent drama series, “Misaeng” (An Incomplete Life), a no-nonsense tale about life as it is led by ordinary workers. He floated the idea of opening a fried chicken shop - the most common mom-and-pop store in Korea - and was threatened with a divorce by his wife. His youngest is still in college. He has daughters to wed. He still has 30 years to live, but no idea how to afford it.
This story is now so common among Koreans. The 386ers are everywhere among us. They take up 17 percent of the Korean population. From 2020, when those born in 1960 turn 60 - the legal retirement age - over 800,000 people will be without jobs each year.
They will be soon joined by people born in the 1970s, who account for 16.5 percent of the population. Over the next 30 years, the country will be overrun with silver-haired people looking for jobs. The first wave of baby boomers born in 1955-59 were just the tip of the iceberg. How would the heroic 386 generation of left-wingers cope with retirement?
The extension of the retirement age has hastened the turning of 386ers into retirees. But society remains oblivious to the potential dangers of this tsunami of a demographic trend. No one can survive 30 years of post-retirement on bank returns of 2 percent per annum. Financial products must offer 4 percent to 5 percent yields to guarantee basic livelihoods. The entire corps of retirees cannot open fried chicken shops or work as apartment security guards. Retirees must be able to work in their fields through part-time and salary peak arrangements. They cannot spend the rest of their days hiking up mountains. But sadly, the dynamism of our demographics stopped in the 1980s.
People might as well give up any expectation that the government will come up with a solution. Each must devise his or her own 30-year plan after retirement. We all stand on an uncharted path. We have no idea where it goes. Our paper promises to keep our readers well enough informed to make the journey less harsh.
JoongAng Ilbo, Jan. 12, Page 34
The author is the business news editor of the JoongAng Ilbo.
by Jung Kyung-min