More seniors forced to find work
The latest example came Wednesday, when Hyundai Heavy Industries, the nation’s largest shipbuilder, announced plans to cut 15 percent of its 10,000 administrative workers.
The company said it will cut 1,500 administrative workers whose posts are managerial level or higher, starting with voluntary resignations.
It also cut 31 percent, or 81 of the 262 executive positions in the company and its affiliates in 2014, when it recorded operating losses of 3.2 trillion won ($2.9 billion) from the first to the third quarter.
In April, Korea’s second-largest mobile carrier KT saw more than 8,000 workers leave the company on a voluntary retirement basis. The same trend was seen in the banking, securities and insurance sectors as well.
However, the recent surge in early retirement among those in their 50s is just a preview of what some experts have called the “retirement tsunami,” which is anticipated to begin within the next five years and last for the next three decades.
When the JoongAng Ilbo conducted a survey in December of 1,000 adults age 40 to 59, it found that four out of five people born between 1955 and 1959, who were already technically retired, were still working.
Korea is actually still recuperating from the wave of retirements among the first generation of baby boomers - the some 7.1 million people born between 1955 and 1963 who account for more than 14 percent of the population.
They are immediately trailed by the second generation of baby boomers, or those born between 1968 and 1974, some 6.04 million people who account for 12.1 percent of the population. Their retirement will start within the next five years.
They are also known as the 386 generation - Koreans born in the 1960s who went to university in the 1980s and came into their 30s in the 1990s - named after the Intel 386 microprocessor that was introduced in their youth.
This demographic will hit their 60s from 2020, which means that about 800,000 386ers will retire per year starting in the next decade.
Following them are the echo boomers, or the children of the first boomers born between 1979 and 1985, who make up a tenth of the population.
On average, the lifespan of the 386ers has increased compared to previous generations, making them among the first wave to be forced back into the labor market in their golden years.
In 2013, the average expected lifespan in Korea was 81.9 years, or 78.5 years for men and 85.1 years for women, according to Statistics Korea.
This is compared to a life expectancy in Korea of 61.9 years in 1970.
“This means people can live until 90 should they not face an accident or disease,” said Jun Kwang-Woo, an economics professor at Yonsei University and the former chairman of the National Pension Service.
However, the new generation of retirees can likely not expect much support from their children and will have to find a way to sustain themselves for decades after retiring.
In most private companies, retirement age is on average 53, so many early retirees must remain on the market to find a new job - which is often beneath that of their previous post - start a new venture or even turn to agriculture.
Goh Yeong-su, 56, voluntarily retired from a large company two years ago and is currently learning about urban agriculture at the Seoul Senior Center in Eunpyeong District in northern Seoul.
“I lowered my standards to small and midsize companies and handed in my resume to various places, but I didn’t receive any calls,” he said. “My colleagues who retired with me are in a similar position.”
The center these days is bustling with those in their 50s, like Goh, who seek reemployment.
“In the less than two years since we opened our doors in February 2012, more than 10,000 people have visited the center for consulting,” said Won Chang-su, who heads the center. “We expect the figure to double this year when compared with the past two years, and our budget also increased from 2 billion won last year to 3.5 billion won this year.”
Domestic policy, meanwhile, has been criticized for targeting rapid growth rather than addressing the issue of retirement. Starting from next year, the retirement age is to be raised to 60, but analysts point out that follow-up measures, such as a salary peak or an increase in part-time jobs, must be implemented soon.
“If the 386 generation is struck by the ‘retirement tsunami’ before proper labor market reforms that are in progress are carried out, this could ignite tension between different generations that would make the ideological battle between the left- and right-wing pale in comparison,” said Kim Dong-won, an economics professor at Korea University.
BY SPECIAL REPORTING TEAM [firstname.lastname@example.org]