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As workforce tilts to 60-somethings, retirement rules zoom into focus

Published: 24 Oct. 2024, 09:40

CHO YONG-JUN
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An older adult looks at a job information bulletin in Mapo District, western Seoul on Tuesday. [NEWS1]

People aged 60 and above made up the highest portion of those employed in September, accounting for about a quarter of all workers in Korea.

Of the 28.8 million people with jobs, those aged 60 and over stood at 6.76 million, surpassing any other age group for the first time since 1981, the first year such data was tracked, according to Statistics Korea.

People aged 50 to 59, the age group that used to have the highest proportion of the working population, landed second with 6.72 million workers, followed by people in their forties at 6.19 million. There were 5.47 million employed people in their thirties, 3.57 million in their twenties and 142,000 between 15 to 19.

The numbers seen in September show a striking contrast to the first Economic Activity Census released in 1982, when only 6 percent of the total workforce was 60 or over.

The increase in the proportion of the working population aged 60 and above is a direct reflection of Korea's aging society — those in their 60s account for 21.78 percent of the total population, while people in their twenties only account for 12.07 percent, according to the Ministry of the Interior and Safety in January.

But the employment-to-population ratio for the age group is also increasing, meaning that it is becoming more common for people to continue to work after hitting the retirement age. The ratio for people 60 and up was recorded at 47.4 percent as of September, 0.4 percent higher on year.

More 60-somethings are also keen on venturing into small business ownership.

The number of new businesses run by that demographic totaled 89,279 between January and July, up 7.3 percent from the same period last year, according to the Ministry of SME and Startups. All other age groups recorded a decrease in the number of new businesses started.

A continuance of the rising proportion of workers in their 60s is expected to spark further discussions about companies continuing the employment of the older generation.

The Interior Ministry recently raised the retirement age from 60 to 65 for contract workers at the ministry, while the new president of the Korea Senior Citizens Association, Lee Joong-keun, proposed a gradual increase of the official senior citizen classification age from 65 to 75.

Prime Minster Han Duck-soo said he would consider the proposal on Tuesday, acknowledging that the “utilization of elders is very crucial to the potential growth of the Korean economy.”

Experts say the primary concern is mitigating the burden on the aged population caused by a decreased income while minimizing the detriment to the younger generation looking for employment. The increase in the legal retirement age from 58 to 60 in 2016 caused a 16.6 percent decrease in the employment of the younger generation, according to a report published by the Korea Labor Institute this year. One major reason for such a result comes down to the wage structure, which pays more to more experienced workers.

The business communities instead propose a more flexible labor system that prioritizes performance over age.

The government will be publishing a “continued employment road map” that will either increase the retirement age, allow for senior workers to be rehired, or abolish the legal retirement age to extend the employment of the older generation.

“An increase in the legal retirement age is inevitable when you wish to use the experiences of seniors by rehiring experienced workers,” Sejong University Prof. Hwang Yong-sik said.

"But the increased wage burden has a high possibility of decreasing employment of the younger generation,” the professor said, adding that a change in the wage structure that focuses more on performance is needed.

BY IM SOUNG-BIN [[email protected]]