Debate is heating up over elevating Korea’s statutory retirement age, because the ruling Democratic Social gathering of Korea (DPK) strikes to extend it from 60 to 65, citing the nation’s transition towards a super-aged society.
Critics warn the transfer may cut back job alternatives for youthful staff and place further burdens on corporations already going through excessive labor prices.
The DPK said that its particular committee on elevating the retirement age has been in discussions with main labor and enterprise organizations — together with the Korean Confederation of Commerce Unions (KCTU), the Federation of Korean Commerce Unions (FKTU) and the Korea Enterprises Federation (KEF) — to coordinate their positions on the proposed laws.
The ruling get together has pledged to cross the invoice by 12 months’s finish, with gradual will increase beginning in 2027 bringing the age as much as 65 by 2033.
Elevating the retirement age was a key marketing campaign pledge of President Lee Jae Myung and stays a significant nationwide precedence. If enacted, it will mark the primary extension because the nation raised the necessary retirement age from 58 to 60 in 2016.
“Respecting the worth of labor is the last word purpose of the Lee Jae Myung authorities and our get together. We’ll cooperate to attain this purpose and proceed to pool our knowledge,” DPK Chairman Rep. Jung Chung-rae mentioned throughout a latest coverage assembly at KCTU headquarters.
Labor teams have urged swift passage of the laws, arguing that elevating the retirement age is important as Korea transitions right into a super-aged society. They warned that protecting the present retirement age may go away a spot for the Korean child boomer era — these born between 1964 and 1974 — earlier than they turn out to be eligible for nationwide pension advantages.
The 2 main commerce union federations held a rally in Seoul, Saturday, urgent for labor rights and the swift passage of the invoice on retirement age extension. They mentioned failure to boost the retirement age may worsen aged poverty and drive up welfare spending.
Job seekers attend a job honest in Daegu, Wednesday. Yonhap
The enterprise neighborhood, nevertheless, has urged warning. The KEF, a number one enterprise foyer, referred to as in its latest suggestions to the Nationwide Meeting for cautious consideration of the proposal, warning of potential impacts on labor prices and the broader job market.
The KEF lately proposed enacting a separate legislation to advertise the reemployment of older staff, fairly than relying solely on elevating the statutory retirement age. It additionally really helpful that preliminary efforts to increase employment be adopted by selective extensions based mostly on firm dimension and kind.
Based on authorities knowledge, the variety of common workers — these anticipated to stay of their jobs for no less than a 12 months — drops sharply at age 60 beneath present labor legislation.
Amongst staff born in 1964, the variety of common workers dropped by roughly 55,000 between ages 59 and 60. The decline was even sharper in giant firms, the place almost half of workers in that age group left their positions.
These figures counsel that extending the retirement age by one 12 months may hold as many as 50,000 older staff employed, probably tightening an already difficult job marketplace for youthful Koreans.
Nevertheless, this proposed answer comes with important financial dangers, particularly for the nation’s youthful job seekers.
A Financial institution of Korea (BOK) report revealed in April discovered that for each older employee who stays employed, between 0.4 and 1.5 jobs for youth disappear. The report added that this impact may worsen because the extended financial slowdown already erodes corporations’ capability to rent new workers.
“Contemplating the expertise of the 2016 retirement age extension and instances in Japan, selling continued employment of older staff can be simpler by post-retirement reemployment fairly than merely extending the statutory retirement age,” the report mentioned.
