Korean Over-60s Dominate Millennials in the Workforce

Korean Over-60s Dominate Millennials in the Workforce

By 2030, a quarter of all South Koreans will be over 65 years old, the same year the overall population is expected to peak at around 52 million before entering a period of steady decline. This so-called "silver tsunami" poses a major challenge for Asia's fourth-largest economy as the young, working-age population declines and the cost of caring for the elderly escalates.

SourceED JONES/AFP/Getty

Why you should care

Because aging populations can be destabilizing.

Governments from Western Europe to Japan are facing challenges as aging populations trigger labor shortages and increasingly onerous social welfare liabilities. But nowhere is the issue as grim as in South Korea, where unparalleled levels of elderly poverty are forcing many pensioners into menial jobs to make ends meet.

According to government statistics that highlight the demographic and economic crises facing the East Asian nation:

South Korea has more economically active people over age 60 than in their 20s.

Elderly poverty affects almost half of South Koreans over the age of 65 — a rapidly expanding demographic that will comprise more than 40 percent of the country’s population by 2060.

In December, the nation reported more deaths than births for the first time as its fertility rate plunged to new lows. “If the natural population decrease continues, South Korean society will face serious difficulties from the greatly reduced number of young people and the relatively big portion of old people,” says Lee Sam-sik, head of the Aging Society Research Institute at Hanyang University. “It will be difficult to maintain the overall industrial structure given the decreasing number of working people and the reduced levels of consumption.”

South Korea’s youth demographic is also facing challenges. Youth unemployment hovers around 10 percent as the nation’s economy struggles to find jobs for a highly educated workforce. “Unless there is a change in the social structure, such as easing job shortages or providing more housing, it will be difficult to convince young people to have more children,” says Lee.

The situation raises questions about South Korea’s economic model. Annual economic growth is roughly 3 percent. But the nation’s manufacturing-heavy, export-oriented model — responsible for South Korea’s rapid development over the past 70 years — is fraying amid increasing competition from neighboring China and the growing threat from artificial intelligence and automation.

South Korea’s youth also have little interest in pursuing the blue-collar jobs of their parents.

Official figures released recently showed that in 2017, 4 million South Koreans in their 20s were “economically active” — a term used to describe someone who is employed or searching for a job. The corresponding figures for South Koreans in their 60s was 4.2 million, up from 3.9 million the previous year.

The statistics reflect the growing number of older people in South Korea. The population of people age 60 and older increased by nearly half a million last year.

But the data also speak to the issues of elderly poverty as well as the nation’s corporate culture. Many of the country’s top conglomerates push staff to retire before age 60 despite South Koreans having one of the highest life expectancy rates in the world.

The situation forces many older people to search for new jobs — often unskilled work — as the state pension is minimal. South Korean President Moon Jae-in has vowed to alleviate the situation by increasing the monthly stipends from 200,000 won ($186) to 300,000 won by 2021.

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By Bryan Harris

OZY partners with the U.K.'s Financial Times to bring you premium analysis and features. © The Financial Times Limited 2018.

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