OPINION: Debates over raising retirement age emerge as South Korea becomes super-aged society

SEOUL, November 11 (AJP) - With South Korea now officially a "super-aged society," concerns are mounting over how to secure stable income for its rapidly growing elderly population. This has reignited discussions about further raising the retirement age, a decade after it was last set at 60 in 2013. Proposals to raise the retirement age to 65 have sparked mixed reactions, exposing generational and social divides over how and when such changes should take effect.

The ruling Democratic Party (DP) aims to pass a bill this year to gradually raise the retirement age from 60 to 65, sparking heated debate as labor unions call for a unified implementation while employers voice concerns over rising labor costs.

Major labor unions want the extension without wage cuts, as it is intended to help secure stable income for skilled senior workers. Employers, on the other hand, fear that raising the retirement age could increase labor costs and reduce employment opportunities for younger workers. With more older employees remaining in the workforce, companies may cut back on new hires to manage costs, which could disadvantage young job seekers.

Statistical data reflect these concerns. The proportion of workers in their 20s among new hires has declined from 51.4 percent in the first quarter of 2022 to 46.9 percent during the same period this year, remaining below 50 percent for eight straight quarters. Employment for those aged 15 to 29, which peaked with an increase of 119,000 in 2022, fell by 144,000 last year.

Small businesses, whose labor costs account for 18.1 percent of total sales, compared with 9.4 percent for large companies, face a heavier financial burden.

Extending the retirement age without adequate preparation could generate friction among generations, labor unions, and employers. Such a change is more than a numerical adjustment, requiring careful consideration of multiple factors including business conditions, hiring capacity, wage structures, and opportunities for younger workers.

Amid the country's ultra-low birthrates and aging population, delaying retirement is becoming increasingly inevitable. However, policies implemented hastily could lead to unintended consequences. It is crucial to reconcile the differing views of labor and management and build broad social consensus.

With the labor market rapidly evolving in the era of artificial intelligence (AI), various forms of employment including remote work, part-time or reduced-hour work, and other flexible arrangements should be considered.

Rather than fixating on setting the retirement age at 65, what matters is providing work opportunities for those who wish to continue working to maintain a steady income after retirement.

The government, labor, and management should work together to ensure that extending the retirement age neither curtails opportunities for young workers nor burdens small businesses.

Lee Hyo-jung, Deputy Director of the Ministry of Industry.

* This article, published by Aju Business Daily, was translated by AI and edited by AJP.

Lee Hyo-jung hyo@ajunews.com