Rapid Population Aging Impacts S. Korean Job Market | Be Korea-savvy

Rapid Population Aging Impacts S. Korean Job Market

Parcel delivery service companies are hiring a growing number of senior workers to complement growing labor shortages. (Image : Yonhap)

Parcel delivery service companies are hiring a growing number of senior workers to complement growing labor shortages. (Image : Yonhap)

SEOUL, Feb. 19 (Korea Bizwire)Kim Man-bok takes pride in being able to walk up subway stairs and talk over his cellphone without a hearing aid at the age of 76.

After getting bored of spending time in parks and mountains, the retired trade company official went out of his comfort zone to do something and earn some money.

The senior pension recipient started working as an express delivery courier five years ago using the subway to get around the traffic-congested city. He mainly goes from one department store to another to deliver such things as clothes, packages and documents, using the free subway pass given to those aged over 65. 

“I try to stay in focus while working because I should not lose my packages and receipts before getting off the subway. I even had phone earphones attached to my ears with bandages to promptly receive calls in crowded places.” Kim said, wearing a multiple-pocketed vest and worn-out hiking boots.

“Sometimes, it’s hard to carry heavy stuff through crowded transfer stations, but I am better than when I first started this. Having a regular job gives me more energy than I thought I had.”

Kim says he earns about 1 million won (US$815.40) a month, with no health insurance, transportation and phone bills included.

Though the wage is less than one-third of his salary at his former job, Kim says he’s “doing all right so far,” together with the 200,000 won in monthly senior pension that he receives from the government. 

The subway courier service is one of many jobs that are seeing a growing number of elderly applicants, who are willing to work for less pay and want to stay as much as they can.’

“More seniors are entering workforces of different sectors to make money and engage in economic activities,” Choi Seung-hee, a senior official at Seoul Senior Job Training Center, said.

“Most of them find jobs in cleaning, delivery and other social welfare services. They usually want pay ranging from 800,000 won to 1.5 million won, with most wages set around 1 million for full-time work and less for part-timers.”

In a country where people believe the 60th birthday is especially important, traditionally considered a milestone for longevity, senior taxi drivers, security guards and store clerks working in their twilight years have become an everyday scene in Asia’s fourth-largest economy.

Last year, 172,000 employees aged 60 or over were new hires, marking the fastest clip among all age groups and far surpassing growth among those in their 20s and 30s, according to Statistics Korea.

As more people live longer and the birth rate fell to a worrisome level of 1.2 in 2014, South Korea is going grey faster than expected to surpass Japan as Asia’s fastest aging nation this decade.

South Korea became an “aging” society in 2000 and is forecast to become a “super-aged” society by the U.N. definition by 2026, when at least 20 percent of the population is expected to be over 65.

Experts warn the rapidly aging population poses a structural challenge to economic growth by shrinking the workforce and putting pressure on state coffers with rising senior welfare and pension spending. 

The National Assembly Budget Office (NABO) expected that the changing demographics will drag down the average economic growth to 3.8 percent in 2014-2020, and fall to 2.6 percent in 2026-2030, and 1.7 percent in 2041-2045.

The ratio of tax income among the gross domestic product (GDP) will fall from 15.2 percent in 2014 to mid-14 percent in 2023-2060 due to the declining economically active population, the NABO said. In contrast, government spending was forecast to rise from 25.4 percent of the GDP in 2015 to 32.6 percent in 2060 because of a sharp rise in welfare costs.

Although more people are finding jobs after retirement, the poverty rate among the elderly is the highest among the 34 members of the Organization for Economic Cooperation and Development (OECD).

The senior poverty rate in South Korea rose from 44.6 percent in 2007 to 47.2 percent in 2011, which is more than triple the OECD average.

The government attributes the poor ranking to a weak public pension system and high ratio of real estate to assets, vowing to encourage senior citizens to receive monthly payments from real estate assets via a private pension scheme.

In the past, family-oriented Confucianism values made it possible to attain high economic growth and welfare outcomes with very low social spending. But a rapid demographic change, a lowering of the retirement age, and decreasing family support have made old age life less economically stable in the absence of adequate public support, experts say.

“The key work force is expected to shrink in the next decade to pose labor shortage problems. The fast-aging population will emerge as a major negative factor for growth after 2020,” Samsung Economic Research Institute (SERI) said in a report.

Public finances will benefit much more if older people work longer to boost GDP and taxes, experts say, stressing the need to improve their health and promote more flexible ways to make that happen.

“The government should come up with customized labor measures based on life cycles and individual cases to minimize the negative effect of the aging population in the labor market,” SERI said.

In response to the growing calls, the government has offered a variety of senior job programs in both the private and public sectors as well as subsidies for employers and employees.

Welfare officials say it is important to connect applicants to the relevant areas based on their expertise and wanted pay to benefit both companies and their hired.

“Those who have an experience of hiring elderly people have mostly given positive feedbacks. Our work is to bridge between workplaces and elderly job seekers to give them more opportunities,” said Ahn Hye-jung, an official at the Ministry of Health and Welfare Affairs. 

The next five years will be a golden time to try various work-sharing and internship programs and expand such services as the baby generation retirees, who were born from 1955 to 1963, will stream into the senior job market starting from 2020, Choi said.

“If there are more training programs to help the elderly utilize their expertise and knowhow, it could promote more senior employment and boost overall productivity,” she said. “I think senior employment will become essential to sustain our society down the road.”


Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>