SEOUL, May 22 (Korea Bizwire) – South Korea’s top central banker on Friday raised worries over bleak job market prospects for the younger generation in the coming years as the country is ready to extend the retirement age to 60 next year, echoing recent policy efforts aimed at revving up structural reform.
“Employment is a big issue. As many people point out, it’s true that unemployment will become a serious issue over the next 2-3 years when the retirement age is extended to 60 starting next year,” Bank of Korea Gov. Lee Ju-yeol told reporters ahead of a meeting with local bank heads. The current retirement age is 58.
Lee cited April job statistics that showed that unemployment rate for younger age groups have increased to the worst level in more than a decade.
Data by Statistics Korea showed that the country’s jobless rate inched down to 3.9 percent from 4 percent last month as more people were hired in the manufacturing and service sectors.
The report, however, also showed that the rate for people in the 15-29 age bracket reached 10.2 percent, the highest reported for the month of April since the agency began to tally the data in 1999.
Lee urged the participants to expand new hires while implementing job-sharing moves, such as wage peak systems and voluntary retirement programs.
KB Financial, the country’s largest banking group, recently announced plans to receive voluntary retirement from some 5,500 employees, the first of its kind since 2010, while increasing new hires by 40 percent.
The central bank chief’s remarks are in line with Seoul’s growing call for fiscal and labor market reform to shore up sluggish growth in Asia’s fourth-largest economy.
Earlier this month, President Park Geun-hye called on the public sector to introduce a wage peak system in order to encourage the private sector to also embrace the job-sharing measure.