More jobs for senior citizens

Japan has enforced a new law on the retirement age from this month. Employers must hire employees around 60 until they turn 65. Companies had rehired staff reaching retirement age on a selective basis based on standards agreed both by labor and management.

Korea needs to change its retirement age policy given the low birth rate and rapidly aging population. Since baby boomers are ill-prepared for life after retirement and healthy enough to work, the existing retirement age of 55 to 58 is outdated. Another problem is the time gap between the actual retirement age and the time when retirees begin to get national pension at age 60. Securing the economically productive population is a must for the country to maintain the driving force of economic growth. With More senior citizens in workplace, the national pension will grow stronger as the pension age will be delayed. Developed countries keep postponing the retirement age and the pensioners` age that start to receive payments as they cannot handle with growing welfare expenses due to an aging population.

If the retirement age is identically extended like Japan, youths will be deprived of jobs. In a seniority-based salary system, those in their 50s make two to three times more than entry-level employees. Older workers with higher salaries put companies under stronger pressure in productivity and labor costs. The forceful extension of retirement ages is not the right way for Korea, which should seek employment flexibility.

The government needs measures to control labor costs in consideration of employee productivity while extending retirement age and allowing companies to rehire employees voluntarily. The seniority-based salary system needs to be changed via introducing a salary-peak system, and incentives should be offered to hire more aged workers. Korea should also create more jobs in social services, an area appropriate for senior citizens. Over the long term, mandatory retirement should be eliminated. In other words, the government should provide companies and employees with opportunities to prefer rehiring and reemployment, not asking companies to extend retirement age. This will increase productivity of both individual companies and society, and gross national income (GNI) and gross national expenditure (GDP) will grow in turn, promoting job creation.

The number of working senior citizens is destined to grow in an aging society with an average life expectancy of 80.7 years. If senior citizens with abundant work and life experience engage in productive activities, they will feel rewarded and contribute to society. To create a happy society for “gray-haired working people,” the government, management and labor should agree on employment flexibility.