Wednesday, March 28, 2012

South Korea: Debate on Raising Retirement Age Continues with Generational Conflict at Issue

According to an article in the Korea Herald, social consensus around raising the retirement age seems to be still out of reach, even as major employers are filling jobs with older employees. Kim Kyung-ho writes that generational tensions are at issue, as some "express concerns that extending retirement age would lead to a further reduction in job opportunities for young people, whose jobless rate is hovering around 8%." In fact, the trilateral commission looking in to the retirement age issue has launched a separate subpanel on "co-existence between generations" and have tasked it with "drawing up methods to increase jobs in a way that avoids a zero sum game that forces a choice between jobs for the young and employment for the old."

In framing the debate, the article contrasts:
Many labor experts have argued that extending the retirement age has little impact on youth employment, saying concerns over intergenerational competition or conflict over jobs are exaggerated in most cases.

“On the level of an individual company, they may appear to be substituted for each other,” said Phang Ha-nam, a senior researcher at the Korea Labor Institute, a non-profit research organization in Seoul.
with a report released by the Samsung Economic Research Institute suggesting job opportunities for young people have been at least partly substituted by the elder generation’s extended employment:
A 1 percentage point increase in the employment rate of people in their 50s translated into a 0.5 percentage point decrease in that of 20-somethings between 2005 and 2010, according to the report.

Particularly from 2007-09 when the global financial crisis brewed and peaked, the rate declined by 0.84 percent for the young but rose by 1 percent for the old.

“It would be desirable for jobs to increase at the same time for both the older and younger generations, but in reality that is not the case,” said Tae Won-you, a SERI research fellow.
Source: Korea Herald "Intergenerational tension over jobs" (March 27, 2012)

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