Ratio of jobless middle-aged, elderly after retirement on rise amid low birthrate, aging society

Middle-aged and senior citizens participate in job education and training programs at the Incheon Senior Resources Development Center, Jan. 11, 2023. Newsis

The ratio of middle-aged and elderly people who remain unemployed after retirement has increased by more than 10 percentage points over the past nine years due to the country’s low birthrate and aging society, according to a state-run agency, Wednesday.

The Korea Labor Force Development Institute for the Aged, under the direct control of the Ministry of Health and Welfare, said that the ratio of people aged between 55 and 64 who remained unemployed after retirement stood at 38.8 percent in 2022, up from 27.9 percent in 2014.

The ratio of those who found new jobs after their retirement decreased to 29.3 percent from 29.8 percent during the same period.

The institute noted that many people in this age group still need to be economically active in order to make a living.

About 30 percent of people in this age group left their workplaces involuntarily, as they were advised to resign or were laid off by their employers. The average age of these people was 52.

The highest proportion of new jobs after retirement were simple labor jobs such as cleaners and apartment guards, at 33.1 percent, but this figure has decreased by 10 percentage points over the past nine years.

Instead, office and service jobs have been on the rise to 8.1 percent from 6.3 percent, and to 17 percent from 12 percent, respectively.

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The institute raised the need to create more jobs that guarantee steady income for retired middle-aged and elderly people, in preparation for increased demand.

“The government’s existing policy that was designed to offer jobs to retirees was concentrated largely in simple labor jobs,” the institute said.

“But our analysis showed that the ratio of those reemployed with simple labor jobs decreased, whereas cases of reemployment in more professional jobs increased. This leaves a task for the government to prepare a greater variety and more professional jobs for retirees.”

As part of efforts to cope with an increasing number of unemployed seniors, the Ministry of Employment and Labor announced a decision recently to expand its financial aid for small- and medium-sized firms that retain workers who pass their retirement age.

Since 2020, the ministry has been providing employers that retain retirement-age workers with 300,000 won ($223) per employee per month.

The ministry said on Jan. 11 that it will expand the period of support to three years from the current two.

“Amid low birthrates and an aging population, seniors these days are highly educated and more skilled, compared to the past,” a labor ministry official said. “We will actively support them so they can be utilized as a core workforce and work longer.”

Labor groups, for their part, urged the government to pay keen attention to the OECD's new economic report on Japan, in which the intergovernmental organization recommended abolishing mandatory retirement in order to secure enough workers amid their population decline.

Among the OECD’s 38 member nations, Korea and Japan are the only two that let employers set a mandatory retirement age of 60.

Such practices are generally prohibited in the United States and some European countries which consider them a form of age-based discrimination.

Joining in the discussion, a new political party founded by former Democratic Party of Korea lawmaker Keum Tae-seop proposed, Jan. 10, abolishing mandatory retirement and instead modifying salary systems to lessen the burden on companies.