South Korea: Supreme Court Raises Retirement Age for Physical Labor

The South Korea Supreme Court has issued a ruling that the maximum age a person can perform physical labor is 65, breaking a nearly 30-year precedent which set the retirement age at 60 in 1989. The court cited changes in key socioeconomic factors such as the increased average lifespan.

As Lee Suh-yoon notes in The Korea Times:

As the age limit is applied when calculating lost income in compensation cases on the premise that the person would have engaged in manual labor, the ruling is likely to affect the age limits for white-collar professions, which have already been varied, such as 65 for doctors and writers and 70 for lawyers or pastors.

The insurance industry is affected the most directly, because in car insurance, compensation is calculated with the age set at 60. If the age is pushed up to 65, the compensation amount would increase.

Sources: Chosun "Supreme Court Puts Retirement Age at 65" (Februarg 22, 2019); The Korea Times "Ruling on physical labor age limit to have huge ripple effects" (February 22, 2019); The Korea Times New maximum working age" (February 22. 2019)

Research: Article Explores Older Workers in South Korea, South Korean Employment Policies

An article by You Yonglim and Sohn Sunju in the Indian Journal of Science & Technology looks at older workers in South Korea through their life stories and experiences in order to interpret how employed older people understand South Korea’s policies and programs for employing older people. Using this method, "Understanding Employment Policies for Older Workers in South Korea (A Biographical Narrative Research)" presents "the policy and practice context of the employment of older people...to help readers understand in greater depth their life stories and experiences and to construct their perspectives on employment policies and practices for older people in the social, political, economic, historical and cultural context of South Korea."

The authors state that "society should develop not only suitable conditions for older people to work in, but also ways of giving older people the chance to improve their capacity to compete in the labor market in order to increase the employment rate of older workers." They also recommend that further research should listen to the stories of unemployed older people about age discrimination in the labor market.

Source: Indian Journal of Science & Technology Abstract Volume 8, Issue 18 (August 2015)

OECD Issues Reports on Country Initiatives To Stimulate Employment of Older Workers Since 2005

In a series of country notes, the OECD has evaluated the impact of recent policy reforms and measures to boost job opportunities for older workers in 21 countries which participated in the OECD 2003-05 review of ageing and employment policies. According to the OECD:

The data show a steady increase over the past decade of the employment rate of people aged over 50 in the OECD area, from 55.6% of 50-64 year-olds in 2001 to 61.2% at the end of 2011. At the same time, the effective age at which people retire has increased slightly: for men, from 63.1 in 2001 to 63.9 in 2011 and for women, 61.1 in 2001 to 62.8 in 2011. The data also reveal a striking difference in 2011 between countries in the share of people aged over 60 still working: from 63.4% in Sweden to 14.2% in Hungary (see data for countries below).

In 2006, OECD issued its report "Live Longer, Work Longer" in which it recommended steps to:

• Strengthen financial incentives to carry on working and reducing incentives to retire early;
• Tackle employment barriers on the side of employers, such as increasing awareness of anti-age discrimination laws; and
• Improve the employability of older workers, such as boosting the incentives for job centres to place older unemployed job seekers in work.

More detailed analysis will become available in a chapter of the 2013 Employment Outlook in June 2013. In addition to the 21 country reports linked below, OECD issued a scorecard on older workers  in 34 OECD countries.

• Australia
• Austria
• Belgium (in French)
• Canada (forthcoming)
• Czech Republic
• Denmark
• Finland
• France (in French)
• Germany
• Ireland
• Italy
• Japan
• Korea
• Luxembourg (in French)
• Netherlands
• Norway
• Spain (in French)
• Sweden
• Switzerland (in French)
• United Kingdom
• United States

Source: OECD Ageing and Employment Policies (October 17, 2012)

South Korea: Will Have World's Highest Average Age by 2045

A report prepared by the Korea Center for International Finance (KCIF), based on findings by the Royal Bank of Scotland, shows that South Korea's population is expected to be the oldest in the world in 2045. In that year, the average age of the country's population will hit 50. In addition, the report shows that the total number of workers in the country is expected to fall by 1.2% every year until 2025, with the figures rising to 2% up until 2050.

In addition, the old age dependency ratio is predicted to steadily rise in the coming years until people over 65, who are no longer economically active, will outnumber workers in 2039. It said in 2050, every worker in the country will have to support 1.65 people who no longer earn a living.

According to an interview with Youngsun Koh, Chief Economist Korea Development Institute, it will be critical for the government to lay out policies that involve more senior citizens and women in the workforce to prevent Korea's aging population from hindering the country's growth.

Sources: Yonhap News Agency"S. Korea's average age to be highest in the world in 2045: report" (June 19, 2012); Airang "Report: Korean Workforce to Be World's Oldest by 2045" (June 19, 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)

South Korea: 50+ Now Account for One-Third of Workforce

News reports state that, according to Statistics Korea, the number of workers in South Korea over 50 grew to more than 8 million for the first time in April, amounting to approximately one-third of the workforce. This amounts to an 11% increase from the previous year and about two-fold increase from 20 years ago.

Ten years ago, people in their 30's accounted for 28.6% of the workforce, followed by those in their 40's (25.8%), 20's (20.7%), 50's (13.7%), and those over 60 (9.6%). The current figures have those in their 40's following the 50 plus at 27.3%, followed by those in their 30's (23.9%), 50's (20.9%), and 20's (15%).

Sources: Arirang "Korea's Workforce is Getting Older" (May 12, 2011); Chosunilbo "One-Third of Workers Are Over 50" (May 13, 2011)

South Korea: Government Thinking about Raising Retirement Age

According to news reports, the South Korean government is cconsidering raising the average retirement age to 60 from the current average of 57 to lessen the impact of the retirement the country's baby boomers. Bae Ji-sook, writing for The Korean Herald, states that, while The "Baby Boomer Committee"--an affiliate of the Economic and Social Development Commission, a group representative of employers, employees and the government--is planning to submit a related bill to the National Assembly, he notes that the plan is expected to face fierce opposition from both employers and employees.

This is not a new conversation, as the article refers to a 2010 survey by online recruiter SaramIn of member employers. According to that, 61.4% said a rise in retirement age was necessary, and about 49% said they needed the skills and experience of older workers, followed by companies seeking stability, craftsmanship and other qualities.

Kim Rahn, writing for The Korea Times, states that the Korea Employers Federation opposed setting a legal retirement age.

“We acknowledge the need for older people to remain in the labor market. But those workers usually receive higher wages according to the seniority system, so extending the retirement age through fixing it by law will weaken corporate competitiveness,” an official of the federation said.

“Instead, we propose the government prepare measures to reduce companies’ labor cost burden, such as not turning non-regular job status of workers aged over 55 into regular ones after two years of employment.”

Sources: Korea Herald "Korea may raise retirement age to 60: report" (February 28, 2011); The Korea Times "Legislation sought to change retirement age to 60" (February 28, 2011)

South Korea: Report Warns of Aging Teaching Workforce

According to an article by Lee Ji-yoon in The Korea Herald, the Korean Educational Development Institute has issued a report, warning that South Korea's teaching workforce was getting older. Specifically, in 2010, the average ages of teachers at kindergartens, elementary, middle and high schools were 31.8, 39.7, 41.3 and 41.5, respectively, reflecting increases since 2000 of 2.5 years, 0.8 years, 2.9 years and 1.7 years, respectively.

“Given that the aging teaching workforce is becoming a universal problem found in OECD member states, the Korean government needs to take follow-up measures to fill the potential teacher shortages,” the report said.

Universities have seen the largest change in older workers, with the percentage of teachers over 50 increasing from 29.5% ten years ago to 45.3% in 2010. For other teaching levels, those in their 50's and 60's increased from 19.8% to 21% in elementary schools, from 13.9% to 21% in middle schools, and from 14.4% to 22.9% for high schools.

Source: The Korea Herald "Report warns against aging teaching workforce" (February 25, 2011)

South Korea: Government To Seek to Encourage Earlier Retirement to Boost Younger Workers

Writing in the JoongAng Daily, Jung Ha-won reports that the South Korean government is intensifying pressure on state-run companies to shed more employees before they hit retirement age to open the door for younger workers. part of its efforts to prop up the job market. The Finance Ministry is expected to unveil guidelines to discourage state-run enterprises from taking advantage of the current system to keep all their older workers on the payroll, instead of keeping only a select few senior workers deemed absolutely necessary.

“Extending the retirement age for all employees can block new employment opportunities for youth and deal a blow to the labor market,” said one Finance Ministry official who declined to be named. “We are preparing guidelines to fend off thoughtless attempts to extend retirement ages.”

In a related story, Cho Jin-seo, writing for Korea Times, reports that government is against state-run firms' moves to extend the retirement age and that the government will introduce detailed guidelines to discourage such measures.

Sources: JoongAng Daily "Gov’t to tighten older worker policy" (February 25, 2010); Korea Times "Seoul Opposes Extension of Retirement Age" (February 23, 2010)

South Korean Workforce Continues to Age

According to South Korea's National Statistical Office (NSO), the number of workers over 40 has increased at a fast pace while those in their 20s and 30s is declining. Over all, employees over 40 rose 3.5% to 13.2 million at the end of 2007 from a year earlier, accounting for 56.4% of the total workforce; this compares with 55.1% in 2006 and 53.7% in 2005.

Similar growth in older workers was also seen in older age groups: those in their 50's accounted for 17.5% of the total in 2007 (as compared to 16.6% in 2006), while those in their 60's accounted for 11.2% of the total in 2007 (as compared to 10.8% in 2006).

A report on the NSO results in The Korea Times states:

"With the rapidly aging population, a growing number of older Koreans, including retirees, are entering the labor market as they are forced to keep on working due to inadequate retirement savings. Also, a larger number of the elderly decide to get jobs for reasons other than financial, including health benefits," an NSO official said. He said the majority of older workers engage in lowly paid positions, usually involving manual labour in the services sector.

Source: The Korea Times "Workers Over 40 Takes 56% of Workforce" (March 20, 2008)

South Korea: Workers Over 65 Are Over 11 Percent of Workforce

According to published reports, workers aged 65 or above accounted for 11.2% of South Korea's total workforce in 2007, up from 10.8% in 2006 and 5.9% in 1985. The National Statistical Office (NSO) reports that the number of senior workers reached 1.52 million in 2007--up 75.1% percent from 869,000 in 1997--as the number of Koreans aged over 65 increased by 66% percent to 4.87 million in 2007 from 1997.

Local companies increasingly prefer to hire workers on an irregular and temporary basis with little job security and lower wages to meet their manpower demand. Older workers who have already retired from previous jobs are willing to accept the lower-paying jobs.

Source: The Korea Times "Senior Workers Account for 11% of Total Workforce" (February 10, 2008)

Korea: Report on Coming Skills Shortages in Manufacturing Advises Industries To Make Better Use of Older Workers

According to a an article in The Hankyoreh, the Korea Institute for Industrial Economics and Trade (KIET) has announced findings on employment policies for aging workers in South Korea’s leading companies in manufacturing industry including steel, shipbuilding and automobile suggesting that with the workforce of the nation’s manufacturing industry rapidly aging, South Korea will soon be faced with a vacuum in the manufacturing industry similar to the one experienced by Japan when that nation’s baby boom generation retired en masse.

For example, at one steel company, as sales have increased for the past three years, the amount of employees has decreased 9.7% and in the process, the average age of employees has risen to 42.1 from 40.1. At a shipbuilder, the number of department managers rose almost 10 times from 1985 to 2005, but the number of deputy managers has been cut in half, but out of the total number of the company’s manufacturing employees, the ratio of those in their 50s has increased from 16.7% in 1999 to 31.6% in 2006.

[Choi Hee-seon of the KIET] advised industries to introduce a peak salary system, in which older workers would not be forced to retire as they are now, and would be given the option of continuing to be employed with a salary decrease that inversely corresponds to their increasing age. The current system forces retirement at age 58 and offers workers an increasing salary that directly corresponds to increases in age until retirement. Choi says that using the peak salary system would allow companies to make better use of older workers. He also advised improving the work process in order to increase the productivity of middle-aged and elderly workers.

Source: The Hankyoreh "As society ages, S. Korea could face vacuum in manufacturing" (September 21, 2007)

Global Aging and Retirement: AARP Releases Country Surveys of Opinon Leaders

In conjunction with a conference on "Reinventing Retirement Asia: Enhancing The Opportunities of Aging" held in Tokyo March 15-16, AARP released a survey of opinion leaders in Asia and Oceania, which reveals that most believe their countries are ill prepared to deal with the challenges of an aging population. Although the survey report covers several aspects of aging and society, two core focuses were on older workers and retirement.

AARP's report--"Aging in Asia and Oceania: AARP Multinational Survey of Opinion Leaders 2006"--was prepared by Princeton Survey Research Associates International thrugh a survey of opinion leaders in the United States and in seven countries in Asia and Oceania. The survey was designed to increase AARP’s knowledge of aging issues and attitudes in key Asian markets and to compare attitudes and policies towards aging in the US to attitudes and policies in Asian and Oceanian societies.

According to the overall summary, opinion leaders vary as to the age at which a worker becomes an "older" worker:

Averaging 60 years of age among all opinion leaders interviewed, the average age at which opinion leaders would consider someone an older worker varies somewhat from country to country, ranging from a high of age 66 in Japan to a low of age 55 in Australia. Half of opinion leaders say that the transition to becoming an older worker occurs some time between the ages of 60 and 69.

Other key findings show that opinion leaders perceive older workers as wise, respected, and productive, but that "businesses do not see older people as a
potential source of productive labor and employers are not well prepared for a future workforce comprised of more older workers." Opinion leaders also say that it is a responsibility to society to address older worker issues, older workers should be accommodated, the mid-60's is an appropriate time to retire, and that there should not be mandatory retirement.

In addition to the full report, AARP has issued specific country reports for the United States and for these Asian or Oceanian countries:

• Australia
• China
• India
• Japan
• New Zealand
• Singapore
• South Korea

Source: AARP News Release (March 14, 2007)

Korea: Government To Raise Retirement Age

According to a report in the Korean Herald, the government plans to raise workers' retirement age as one prong of a strategy to fend off anticipated labor shortages. Another prong is to reduce the length of compulsory military service.

With respect to retirement, the government will push measures to extend the retirement age by five years--raising the age for receiving public pension payments by five years to 65 by 2033; currently, Koreans on average retire at 56.8 years of age. In addition, the government will provide support for employers to allow their workers to retire later and also remove some discriminatory rules against senior workers.

Source: The Korea Herald "Seoul to raise retirement age" (February 6, 2007)

South Korea: China and Japan Compete for IT Workers To Replace Aging Workers

South Korea, which is having its own aging problems, is losing a significant number of workers to non-Korean employers overseas due to job shortages, according to DongA.com. Moreover, Korean companies are not making enough systematic efforts to retain workers.

China is eying Korea’s high-tech workforce who they think will boost its industrial growth. Grappling with an aging population, Japan is looking for workers who will help relieve itself of the burden of workforce shortages.
...
Japan is luring more Korean workers to enhance its IT competitiveness and resolve its workforce shortages problem caused by aging. Indeed, the Japanese government and businesses are making hard efforts to recruit Korean and Chinese IT workers under the second-phase “e-Japan” project whose main objective is Japan’s comeback as an IT powerhouse.

Source: DongA.com "China, Japan Inc. Recruiting Koreans" (December 23, 2006)

South Korea: Aging Scientists Brought on Board To Help Smaller Firms

According to an article by Park Bang-ju, in the JoongAng Daily, under a South Korean government program, "small and medium-sized companies in Korea are getting the chance to harness the experience and know-how of scores of recently unretired scientists." Specifically, it reports that the Science Ministry has announced yesterday the names of 79 scientists to be brought out of retirement and of 79 companies where they will work. "Scientists who had worked at a state research facility for 20 years or more were invited to apply via the Internet for posts as technical advisors."

Source: JoongAng Daily "Elders get last hurrah at small domestic firms" (September 5, 2006)

Korea: Over-50 Workforce Becomes Largest Segment

According to Korea's National Statistical Office (NSO), the number of workers over 50 surpassed the working population of those in their 30's and 40's for the first time--the number of workers over 50 stands at about 6.5 million, or 27.7% of the workforce, as compared to 6.2 million, or 26.5%, in their 30's and 6.45 million, or 27.6%, in their 40's. Out of workers over 50, 3.89 million were in their 50s and 2.61 million were over 60.

Source: The Hankyoreh "People over 50 emerge as mainstream workforce" (July 18, 2006)

South Korea: Leaders Adopt Social Convention Aimed at Aging Population

Seo Dong-shin reports in The Korea Times that, after five months of discussion among business, labor, and religious and civic groups, South Korea's government has adopted a social accord aimed at battling problems arising from Korea's falling birthrate and aging population. Among other things, "labor and business circles, for their part, will attempt to create more job opportunities for women and seniors, according to the accord."

The government has also agreed to continue discussion on ways to extend the retirement age of workers, while labor and businesses will negotiate on how to improve the retirement and wages system.

Source: The Korea Times "Korea Adopts Social Pact to Battle Low Birthrate" (June 20, 2006)

Aging and National Credit: Standard and Poor's Reviews Global Graying

On May 31, 2006, Standard & Poor's Ratings Services published a report outlining various simulations through 2050 of the fiscal and hypothetical sovereign ratings implications for 32 sovereigns, including all 25 EU members, as well as Canada, the United States, Australia, New Zealand, Norway, Japan, and the Republic of Korea. While the commentary article "Global Graying: Aging Societies and Sovereign Ratings" is only available to subscribers to S&P's RatingsDirect, they have also been publishing country by country reports, some of which speak to aging workforce issues. Some of these (Germany, Belgium, France)are available for free to people who register at S&P's website and others have had some press coverage.

A key conclusion of the main report is the fall-out that ageing may have on government solvency. Without further adjustment either to the current fiscal stance or to pension and health care costs, the median general government net debt-to-GDP ratio for the sample will reach an overpowering 180% of GDP by the middle of the current century, from 33% in 2005.

Publically available country specific reports include:

• United States
• New Zealand
• Japan
  

Source: Globe & Mail "Nations get 'wake-up' call about aging workers" (June 6, 2006)

Asia: University of Chicago Executive MBA Program Attracts Older Ages

Writing in The Korea Times, Chung Ah-young reports on an executive MBA (EMBA) program that will help seniors successfully continue developing their business skills over their long careers in an aging society. According to the article, "Beth Bader, managing director of the EMBA Asia program of Graduate School of Business of the University of Chicago in the United States, said getting an adult education and continued investment in oneself, through the EMBA course, are crucial in almost any field, for successful long-term careers."

``People begin to realize they don’t want to spend their whole or half their life just declining as they are getting older. In a sense, they can reinvent themselves, if they want to do that. Or they can make a very significant jump in their abilities and flexibilities in the very specialized business program,’’ Bader said.

She stressed that in societies with aging populations, people hope to work longer.

``That’s why I predict more demands for the EMBA course for older ages and more mature-aged students here in Korea and other aging countries. Particularly, business in Korea has been much more mature. People are going to need to work a lot longer than they have done in the past. I think it has happened already in the United States,’’ she said.

Source: "Executive MBA Program Targets Seniors" The Korea Times (February 1, 2006)