Middle-aged population is short of work and income

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Middle-aged population is short of work and income

Middle-aged people are vital to an economy. But Statistics Korea has found that individuals aged 40 and up are not only facing job insecurity but also earning very little when they are employed: more than 60 percent of them make less than 2 million won ($1,770) a month.

In the first study of its kind, the statistics agency focused on individuals born between 1953 and 1977. Korea had 19.7 million people in that age group last year, or 39.4 percent of the total population.

Within the group, 67.6 percent in their early 40s were employed, the highest ratio in the study, while only 46.7 percent of those in their early 60s were employed, the lowest ratio.

In total, 12 million, or 61.4 percent within the age group studied, were employed. Of those employed, 76.9 percent, or 9.29 million, were paid employees, while 19.9 percent, or 2.4 million, were in unpaid positions. Nearly 400,000 people, or 3.3 percent, had both jobs that paid and jobs that didn’t.

Unpaid workers are mainly people who either own a business or work in a family business.

Individuals in their current position for fewer than three years were 54.6 percent of those in the study, while 32.7 percent had worked in their jobs for less than a year. Only 12.5 percent said they had worked for more than 10 years, and 11.2 percent worked in their current position for more than two decades. The study suggests that many of those in the age group were working on temporary contracts.

Only 36.2 percent were employed at conglomerates. Nearly 19 percent worked at businesses that have between 50 and 299 employees. But 45 percent worked at companies with fewer than 49 employees.

Most people in the study worked in manufacturing, with 22 percent of the total.

Of people in the age group owning their own businesses, 26 percent owned retail or wholesale companies while 15.7 percent ran restaurants or lodging establishments. Of the businesses, 93 percent had four or fewer employees and 86.6 percent had been in operation for three years or less.

The average income in the study was 33.5 million won, with nearly 64 percent making less than 30 million won a year. Those earning less than 2 million won a month were 66.9 percent of those in the age group in focus, while 19.7 percent made between 2 million and 3 million won.

The study also found that 55.2 percent of those in the age group had loans from financial institutions.

People in the age group of the study need strong incomes as they are usually raising children and paying for educations. A total of 60.2 percent had children at home, and 39.5 percent had teenagers in the house. Among the children living with their parents, 47.3 percent were aged 19 or older, not working and financially dependent on their parents.

The homeownership rate in the study was 63 percent, while 44.6 percent owned a single apartment and 18.7 percent had two or more apartments. Of the apartments, 30.9 percent were valued between 150 million and 300 million won.

The study found that 73.2 percent were enrolled in pension programs, with men having a higher rate of participation (82.5 percent). The rate for women was 63.9 percent.

“The administrative statistics on those middle aged and older were gathered to better understand the economic activities of individuals preparing for life after retirement and to help with the development of policies related to aging society,” said Park Jin-woo, head of the administrative data management division at Statistics Korea.

The statistics agency official expressed concern that so many middle-aged people were starting their own businesses. They are at risk of losing their retirement savings as they battle competition in crowded fields.

“It is notable that more people in their 40s are moving from paid employment to the unpaid category than in other age groups,” Park said. “While we can’t say all of them are starting their own businesses, it is true that the ratio of people starting their own businesses is high.”

Among people aged 40 to 44, 40.6 percent quit their jobs to start their own businesses, the highest ratio in the study. Only 32.5 percent of people in their 60s made the same move.

BY LEE HO-JEONG [lee.hojeong@joongang.co.kr]
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