Lee Hyo-jin covers the Bank of Korea, the banking industry and broader financial news. Her previous beats include foreign affairs, North Korea and general reporting on Korean society.
Elderly population outgrows social safety net
By Lee Hyo-jin
Experts call for drastic measures as Korea braces for ultra-aged society
By Lee Hyo-jin
Korea's consistently low birthrate coupled with a higher life expectancy is rapidly transforming the country's demographic structure. The latest data from Statistics Korea projects the nation to become a super-aged society by 2025, in which over 20 percent of its 52 million population are aged 65 and older.
In line with the increase in the elderly population, the number of economically vulnerable senior citizens is rising at a rapid pace.
According to a 2022 OECD report, the relative poverty rate among people aged over 65 in Korea came to 43.2 percent, the highest among its member countries, and a position the nation has maintained for several years. The relative poverty rate refers to the proportion of the population whose income is below 50 percent of the nation's median income.
Experts, who pointed out Korea's ill-preparedness for the imminent transformation into an ultra-aged society, said the government should urgently revamp the nation's welfare system and take drastic steps to bolster the social safety net.
Hur Jun-soo, a professor of social welfare at Soongsil University, said that the overall quality of Korea's welfare measures for the elderly remains near the bottom among 38 OECD member countries.
“The share of the budget allocated to senior welfare out of the nation's total welfare budget stands at 25 percent. This is a significantly low figure compared to 45 percent in Japan or 39 percent in France. Government spending on senior citizens' welfare should increase in line with the country's economic growth as well as the aging population,” he told The Korea Times.
As for the main reason why so many elderly Koreans are struggling with poverty compared with other countries, he pointed to the late introduction of the national pension scheme.
“Korea's public pension system was first launched in 1988, whereas it was introduced a century earlier in countries like Germany. Also, the basic monthly pension paid to retirees is too small compared to other countries and insufficient to cover their basic needs.”
Stressing the need for pension reform, the professor also said that lengthening careers is essential to guarantee future retirees an adequate monthly pension and ensure the national pension's sustainability.
“The retirement age currently set at 60 should be extended to at least 65, and possibly to 70 in the long term. This will allow people to remain active in the labor market longer and thus enable them to make more contributions to their pension,” he said. “Plus, staying socially active is good for both mental and physical health.”
Moreover, he called for the government to urgently expand support for those in extreme poverty by increasing affordable housing options and food banks, as well as providing them with preventive healthcare services.
An elderly man drags a handcart loaded with paper and cardboard. Korea Times file
Chung Soon-dool, a professor of social welfare at Ewha Womans University, observed that middle-aged Koreans, who spend too much money on their children, fail to make enough savings for their post-retirement life. And this largely leads to a reduced standard of living in their old age.
“Such a tendency is observed in most Koreans. Some are even willing to pull out money from retirement accounts to support their adult children,” she said.
In order to resolve poverty issues among the elderly, the head of Ewha Institute for Age Integration Research said the government should provide them with timely education and skill training programs, which will help them re-enter the labor market.
“In a 100-year-life era, the perception of retirement has changed. Many retirees are looking for second-act careers, but they do not know where and how they can begin one. There should be lifelong education programs helping retirees acquire new skills and knowledge,” she said.
She also stressed that prevailing discrimination against the elderly should be eradicated. “Seniors are often considered no longer productive. But actually, they can be contributing members of society if they are provided with employment support.”
However, she was skeptical about using government spending to create irregular, temporary jobs for the elderly as it often leads to a backlash from younger generations and may spur hatred toward senior citizens.
Chung said, “Encouraging private businesses to hire senior workers for part-time positions would be a better option.”
Emotional care
The two experts also pointed out that the government seems to be overlooking the importance of the emotional well-being of the elderly, saying that the current welfare policies are focused only on economic support.
“About 1.28 million senior citizens were found to be living alone as of 2021,” said Hur. “The loneliness and social isolation of the elderly have been neglected and not a lot is being done to address the issue.”
He called for state-level measures, mentioning the “loneliness minister” position created in the U.K. in 2018 to tackle loneliness through government intervention.
Chung said, “There also should be community-level projects to restore social relationships among neighbors through various cultural programs. Community centers and food banks play a big role in bringing elderly people together to spend time and have meals.”