[Macro Today] Work hard, die poor

The Korea Times

The Korea Times

Finance

Tue, September 26, 2023 | 10:54

Economy

Macro TodayWork hard, die poor

Posted : 2018-09-30 10:09

Updated : 2018-09-30 17:48

People look at job postings for seniors on a bulletin board at a fair in Busan, Sept. 19. Yonhap

By Park Hyong-ki

There is a new saying in town, or better yet what many prefer to say "silver town," as the country's population grows older and shrinks.

"Study hard, work harder and die poor."

This deviates from what many used to embrace and find hope in their senior years after committing and sacrificing their youth to long working hours ― work hard, play hard.

Playing hard and enjoying retirement is out of the question now, at least for those in the middle and low income groups, since Korea ranks near the top in its poverty rate for the elderly among developed economies.

The rate is 45.7 percent, according to OECD data released in June 2018. This is far higher than the OECD average of 13 percent. The state-run Statistics Korea, in its own measurement, said recently the rate stood at 43.7 percent.

Nearly half of individuals aged over 65 live in poverty here. Or as the OECD professionally puts it, they live off an "income below half the national median equivalised disposable income."

Simply put, the poverty rate is extremely high here, and the elderly will need jobs to survive because they cannot depend on the pension that will dry up in the near future or any other types of social safety net or lack thereof.

The high rate is the reason behind the rising number of senior citizens looking for jobs.

The elderly would do anything to hold onto their jobs they already have or get jobs for smaller pay checks without yielding to the young, who face record high unemployment.

A vicious cycle is in motion in an economy that also has high alcohol consumption, accidents, smoking and suicide rates, which are closely interlinked with poverty and unemployment.

Having a high elderly poverty rate has serious implications as it undermines confidence of both the young and old. It also has a negative psychological impact on the way people perceive life, work and company, asking themselves, "Why work hard when you end up with nothing to enjoy?"

People will get greedier and selfish especially when it becomes harder to get by. There will be fewer people who would want to share with their communities, and who would want to have children because they would consider them as some sort of "debt." Ergo, that is why Korea has a declining birthrate and rising single households.

This is definitely an extreme way of putting things, just from the high elderly poverty rate. But it should not be ignored by policymakers because without making social progress, this economy can forget about achieving sustainable, healthy growth.

Eradicating poverty along with others that are a threat to the social well-being of the economy is a job for those with a strong sociology background who know the ins and outs of demography. The fact is the finance ministry with its army of economists did not do well even after it poured billions into trying to resolve those socioeconomic problems.

The government should, therefore, reorganize its agencies' duties to truly get to the root of the problem by taking into account the words of John F. Kennedy: "Social progress is not a substitute for economic development. It is an effort to create a social framework within which all the people of a nation can share in the benefits of prosperity, and participate in the process of growth."

hyongki@koreatimes.co.kr