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Not getting any younger

Published: 23 Nov. 2020, 19:36

Sohn Hae-yong
The author is a business news editor of the JoongAng Ilbo.

The demographic findings from the National Assembly Research Service in 2014 painted a bleak outlook for South Korea. According to a population simulation, if the fertility rate of 1.19 at the time continued, South Koreans could become extinct by 2750. The population will slip to 40 million in 2056 and to 20 million by 2100. The tally will shrink to 3 million in 2198 and 1 million in 2256. Five centuries later, South Koreans will cease to exist.

The extinction could come quicker at the current fertility rate of 0.8. Births can increase depending on the situation. Still, there is no doubt South Korea is heading toward a demographic cliff, with the world’s lowest birth rate and fastest aging population.

Low births lead to a thinning population and depress demand and the economy, which further dampens the birth rate in a vicious cycle. When the working population thins, output falls and consumption weakens to discourage investment. Welfare costs increase, raising the burden on taxpayers and sending manufactures overseas for a better business environment, shaking the whole economy.

The biggest reason for the country’s demographic crisis is that the young generation is waiting to marry, giving up on it altogether, or having fewer or no children. Starting a family has become a luxury for them as jobs have become scarcer and decent living spaces unaffordable, not to mention the overwhelming cost needed to raise children. Couples opt to not have children because of the financial burden. The government has spent over 200 trillion won ($180 billion) to promote births, but failed to change the decline in our birth rate.

Empty beds for newborn babies at a hospital in Seoul. [NEWS1]

The time has come to seriously study other options, which have been put aside in the face of strong social resistance and longstanding prejudices. First, our legal retirement age should be increased to age 60. Deferred retirements will help sustain the working population and ease the toll on economic growth and output. Increasing welfare costs also could be salvaged as people would have more time and money to save for their retirements. But since job opportunities might be lessened for the young, a new pay system needs to be designed so as not to burden employers too much.

Changing our traditional conscription system is also being discussed. When women also become eligible to enlist, more men can commit to economic activities. Increased female enrollment also can help address a shortage of manpower in the military. The move, however, could provoke public concerns about national security in a standoff with North Korea, who South Korea is still technically at war with.

Changes in the system should follow in line with changing views on marriage. Many women wish to have a child without marriage commitments. France tackled birth rate issues by bestowing equal benefits to cohabitants. In this case, the rights of children can be questioned since our social and economic environment has not matured enough to engage child-rearing cost for single mothers.

If we cannot resolve the problem internally, we can seek answers from outside. Korea could open up in a full-fledged way to skilled foreign workers. Japan is the sole country without an open immigration policy among advanced nations. That step could stoke strong resistance in the short term due to biases against foreign workers and the fear of losing jobs to outsiders.

A director-level government official who was a member of a task force to tackle our demographic challenges told me that it had studied all options available. But they were put off due to the political risk of losing favor with conservative public sentiment. But time is not on Korea’s side. In six years, South Korea joins the hyper-aged society category. We should start discussing the matter so that we can find answers to what scope of changes our society can accommodate to get ourselves ready for a precarious future.