By Kim Rahn
People are increasingly worried about how to finance welfare programs for the elderly because the average age of the population has continued to rise rapidly since the start of the 21st century.
Some reports estimate that by 2040, it will take two Koreans aged between 15 and 64 to support one senior citizen aged 65 or above through tax revenue. Moreover, one of President-elect Park Geun-hye’s policy pledges is to double the state pension for those over 65.
The seriousness of the long-term picture and the financial burden that will inevitably fall on the shoulders of younger generations was excluded from public discourse until Park’s marginal election victory on Dec. 19.
People in their 50s or over accounted for 40 percent of the total electorate, outnumbering those in their 20s and 30s who amounted to 38.2 percent, for the first time.
Park, from the conservative Saenuri Party, had overwhelming support from the older generation, beating her liberal opposition rival Moon Jae-in who was favored by young voters.
With the older generation emerging as the decisive group in elections, politicians will be pressured to implement policies to satisfy this demographic group, such as expanding welfare support, healthcare support and post-retirement skills training.
As a result, young people are beginning to express concern about the unavoidable tax burden that they will have to shoulder so that the government can finance its planned welfare schemes.
This anxiety has recently found emotional public expression. Right after the election, an online petition was launched, signed by people calling for the abolishment of the policy of offering free subway rides to senior citizens aged 65 and above.
Young bloggers, mainly in their 20s and 30s, argue that senior citizens should be made to pay the price for supporting Park, known for her opposition to offering “welfare for all.”
The younger generation’s anxiety may grow, as Park is considering spending the funds of the mandatory national pension, which is mainly paid by people in their 20s to 40s, for financing the old-age pension she has promised to double.
Experts say parts of Europe and Japan, which experienced the aging population issue earlier than Korea, also had to deal with similar tensions arising from the generational divide on such issues as extension of the retirement age and welfare financing. Now, Korea is experiencing the same challenges, given that the country is one of the fastest aging societies in the world.
Kim Yun-tae, sociology professor at Korea University Sejong Campus, said it is right to expand welfare for the elderly because 45 percent of senior citizens make less than half the average worker’s income, the largest such proportion among OECD members.
“They sacrificed themselves in the past and contributed to the development of Korea, so they deserve welfare. However, it is regrettable that conflicts emerge between them and the younger generation over the distribution of wealth and welfare and that they are regarded as obstacles to young people’s future,” he said.
On the other hand, Kim noted, the younger generation is now economically unstable, suffering from extreme difficulty in landing jobs.
“In the past, society didn’t offer much welfare, but people in their 20s or 30s could find jobs easily, so they didn’t have much desire for welfare. But now, finding a job is difficult and college tuition is very high, so young people are sensitive to welfare issues, especially regarding education and employment,” he said.
The professor said Park, who was overwhelmingly supported by senior citizens, should consider the consequences of her election victory seriously. “The result caused a generational conflict, brought a huge dissatisfaction and anxiety to people in their 20s and 30s. The President-elect needs to prepare policies that can solve their hardship,” he said.
Regarding jobs, extending the retirement age while asking companies to set up a recruitment quota for young people are contradictory policies.
“It seems that young and old generations’ interests clash over jobs. But we should make efforts to find a win-win strategy,” Kim said.
The professor called for long-term policy measures.
“Rather than lowering tuition immediately, welfare programs for young people should be focused on assisting their future economic activity, such as offering more job training, because they will become part of the economically active population,” he said.
“In other words, welfare expenditure should be linked to economic growth,” he added.
More importantly, Kim suggested the nation adopt a “generation impact assessment” program.
“Many countries, including Korea, have a gender impact assessment system through which they evaluate whether policies are fair to both genders and how policies affect men and women. Now we’ll have to apply a similar one to generational issues, predicting what impact a policy can have on different generations,” he said.