Big firms playing dumb to challenges of aging population
By Kim Tong-hyung
A workforce aging in dog years has been fueling apocalyptic talk about the future of Korea’s economy. Nonetheless, the country’s biggest corporations continue to display a maddening inability to think beyond the next quarter.
Policymakers like Strategy and Finance Minister Bahk Jae-wan are frequently expressing alarm over the country’s increasingly top-heavy population structure and the possibility that it will become a ticking time bomb for a nation so thoroughly reliant on its industriousness.
While there has been a wealth of policies, plans and approaches debated at the government buildings in Gwacheon, it seems that the arguments on two issues are more important than others: improving the work participation of young women and extending the retirement age at firms.
However, the progressing talks among authorities over rewiring employment attitudes will hardly matter when the large companies are as willing as the girl from ``Drag Me to Hell.’’
It’s almost too easy to find a female employee expressing frustration about compensation and the pace of her advancement at the workplace. Then there are the millions of school leavers and graduates bearing the brunt of the economic downturn and raising worries about an entire generation lost to joblessness.
A mid-level manager from a Hyundai affiliate is busy scanning for job openings because women “can only go so far on a Hyundai payroll.” Another woman in her early 30s applying for a mid-level position at a Samsung affiliate is asked whether she has any plans to have children. She doesn’t get the job and it’s unclear whether a ``no’’ would have mattered more than her MBA degree.
SK, LG, GS and Hanwha are among business groups that have reputations of avoiding female graduates out of college and records show that men accounted for at least 80 percent of the new hires for each organization in 2010. Banking groups like Shinhan Financial and the Korea Exchange Bank (KEB) are known for their massive pay gaps between their male and female workers.
Meanwhile, deafening complaints continue to come from the Korea Employers Federation (KEF), an influential lobby that represents the interests of the chaebol, Korea’s mighty family-owned conglomerates. The KEF is passionate about opposing suggestions for improving corporate prospects for women and changing retirement ages.
It recently published a study claiming that any attempt to extend working careers and ensuring the job security of workers will hold back companies from creating more positions for young people. This was after it so elegantly insisted last year that government efforts to boost births put too much pressure on the finances of firms and may prevent them from hiring women.
``There are possibilities that a potential extension of the retirement age would aggravate a generational conflict over a limited number of jobs, creating a picture where fathers are taking positions that would otherwise go to their sons,’’ said a researcher from the KEF’s social policy team.
According to the KEF’s survey of employment officers at some 300 large firms around the nation, more than 54 percent of the respondents thought that an extended retirement age would negatively influence their hiring motivations.
``It’s also regrettable that jobseekers with university degrees are looking only to the few, good jobs that are there and willing to wait a year or two to land those positions, which is definitely a national waste. It would be helpful for everyone if young people were more open to jobs with less pay and job security and show a willingness to gain experience in their respective fields before moving up to better jobs,’’ said the KEF official.
Well, try telling that to Kim Seong-bin, a 35-year-old local government worker who struggled through three jobless years out of college before giving up on private companies and took the state exam to become a low ranking civil servant. When asked to give his thoughts about the KEF report, Kim looked as if he just threw up in his mouth.
``Oh, since when did they start worrying about creating jobs for young people,’’ he said.
``If chaebol chairmen are so concerned about giving more quality jobs to young jobseekers, then they could provide great help by reducing the positions they deliver to their children on a silver platter. The KEF is the same organization that complained about the level of inheritance tax and how it prevents the dynastic corporate owners from transferring more wealth to their families, and now they think they can talk about what’s good for the masses.’’
Ahn Joo-yeop, a researcher from the Korea Labor Institute (KLI), claims that discussions about extending the retirement age wouldn’t advance meaningfully without discarding the ``flawed’’ notion that young people are competing for the same jobs as older citizens.
``The jobs that are going to young people and the positions that are available to middle-aged people or older are clearly different, so all the talk about a generational rift over jobs seems off. The core of the problem is that through the financial crisis, the business sector has lost its ability to create quality jobs as companies increasingly rely on low-paid, precarious labor. This really has been affecting the employment motivations of young people.’’
Korea’s official unemployment rate was 3.7 percent for March but the reality of the job market is even worse as the figure was softened by the outrageous size of the population squeezed into the economically inactive category.
There were 1.07 million people listed as unemployed, but a staggering 16.2 million labeled as economically inactive, which means they have either chosen not to work or given up looking for a job. To put it bluntly, more than 42 percent of Korea’s working-age population over 15 remains sidelined form the labor market.
And the majority of new jobs created in recent months have been going to people in their 40s, 50s and 60s, indicating that the job figures have been padded by low-paid, casual work.
Korea’s working-age population is expected to enter a lengthy period of decline from 2017, according to government studies, and improving the low participation rate of women is considered key to mitigating the fall in labor input.
A recent report by the Organization for Economic Cooperation and Development (OECD) ranks Korea third lowest among its developed member states in work participation for women between the ages of 25 and 54.
Encouraging a better work-life balance and expanding the availability of high-quality and affordable childcare will be critical to prevent women from falling out of the workforce and also increase the country’s low birth rate, said the Paris-based think tank.
Economic activity among women aged between 25 and 29 was measured at 69.8 percent in 2010, according to the latest available figures from Statistics Korea. However, the figure dropped dramatically to 54.6 percent for women aged between 30 and 34, as the pressure of working long hours and a lack of maternity support is taking a toll on those with young children.
The pay gap between men and women also remains wide, so when couples discuss how they are going to afford childcare, it’s normally the wife who stays at home. On average, a female employee earned less than 70 percent of what her male counterpart took home last year. And the employment statistics for women are padded by casual and precarious jobs to a larger degree than men, according to official job market statistics.