Korean senior citizens suffer from extensive wealth gap

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Korean senior citizens suffer from extensive wealth gap

Nearly four out of 10 senior citizens earn less than the minimum wage, and income inequality in Korea is the second worst among Organization for Economic Co-operation and Development (OECD) member states.

According to the Korea Labor Institute (KLI) on Sunday, the Gini coefficient - an income inequality rate - for Koreans 65 and older was 0.422 as of last year, the second worst among OECD nations following Chile (0.428).

The Gini coefficient is based on the comparison of cumulative proportions of the population against cumulative proportions of income they receive, and it ranges between zero, in the case of perfect equality, and one, in the case of perfect inequality, according to the OECD. Any figure over 0.4 is considered to show very serious inequality.

Overall, income inequality for Korean was not bad. recorded good scores, on the contrary. The figure for Koreans aged between 18 and 65 was 0.28, lower than in major developed countries including the United States (0.392), the United Kingdom (0.353) and Germany (0.299).

But for seniors, the situation is much more dire. As of last year, the employment rate for Koreans aged 60 and older was 38.9 percent as an increasing number of baby boomers retire and look for new jobs. Many are not able to live on their severance payments.

Among Korean seniors who worked as of last year, nearly 37.1 percent earned less than the minimum wage, which is 300 percent more than the figure for all Korean workers, which was 11.6 percent. The report suggested that many Korean seniors work relatively unstable jobs such as watchmen, cleaners and housekeepers.

The report also shows a gender gap among Korean senior workers. Female seniors earned only about 60 percent of what their male counterparts earned and more than 70 percent of them received the minimum wage or lower, the report said.

On the flip side, there are many Korean seniors who earn a lot of money from retirement benefits or pensions after retiring from government, schools or the military. This led to the polarization in seniors’ incomes.

“The government needs to come up with policies in order to ease the inequality and solve the poverty rate for seniors,” said Kim Bok-soon, a senior researcher at the KLI. “One needs to consider that there are many seniors who are working and find ways to create some quality jobs for them.”

Kim also warned that the Korean population is aging faster than other major countries. According to the report, it took France 115 years for the proportion of people aged 65 and older to grow from 7 percent of total population to 14 percent. It took the United States 71 years and Japan 24 years.

“Korea is expected to take about 18 years and the figure will reach the 14 percent in 2018,” Kim said. “Life expectancy is growing. People have to work together to be prepared for the change in the labor market.”

BY KIM YOUNG-MIN, KIM YOUNG-NAM [kim.youngnam@joongang.co.kr]

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