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Demographic cliff in S. Korea is just around the corner

Posted August. 29, 2020 08:12,   

Updated August. 29, 2020 08:12


The population growth was the lowest in history and the share of the aging population hit the record high in South Korea last year. According to the 2019 Population and Housing Census data released by Statistics Korea on Friday, total populations of the country rose 0.3 percent to 51.78 million in 2019 from the previous year with only a 0.04 percent increase in Koreans. Meanwhile, the share of those aged 65 or older surpassed 15 percent for the first time, making it clear that a superaged society predicted to arrive by 2025 is just around the corner.

The government has put forward measures to address the demographic cliff, which includes raising the economic participation rates of women, young people, and seniors and utilizing foreign labor, on Thursday. These highly impactful policies developed by the second task force for population policies under the leadership of Minister of Economy and Finance Hong Nam-ki seem rather raw and ill-prepared.

For example, its policies for senior citizens based on the approach of improving senior treatment is likely to lead to the raised age standard for the categorization of seniors from the current 65 years old to 70 years old, which can cause a lot of conflicts and tensions in society. Besides opposition from seniors themselves about the benefits “offered and later taken away,” raising the age standard is closely related to increasing the legal retirement age and adjusting the age at which national pensions are provided. Another factor to consider is the fact that South Korea has the highest senior poverty ratio among OECD member countries. Seniors with no income will find themselves without welfare benefits, which puts them at risk.

The task force also included a policy to grant citizenship to the children of foreigners born in the country based on the territorial principle. Efforts to secure foreign labor through foreign students and workers are necessary but granting citizenship to anybody born in the country can cause a lot of controversies.

The demographic cliff as a result of rapid population aging and declining birth rates is the harsh reality facing South Korea. It is difficult to address such a massive trend with a few policies, especially as each policy involves complicatedly intertwined conflict factors, such as opinion differences among generations, welfare benefits and taxes, and burden imposed on corporations. As the government announced a plan to collect opinions by the end of this year, it must be also accompanied by a detailed examination of potential side effects. The demographic cliff issue requires a lot of thinking and caution as if solving a high-level equation.