South Korea’s older workers are facing steep wage cuts and insecure work conditions simply for staying on the job past a certain age—a reality drawing criticism from rights groups.
Why It Matters
South Korea has one of the highest rates of elderly poverty in the developed world. According to Human Rights Watch (HRW), 38 percent of people over 65 live in relative poverty.
The nation’s “peak wage” system and mandatory retirement policies are pushing many older workers into lower-paid, more precarious jobs, even as the country faces a shrinking workforce and a falling birthrate.
Newsweek reached out to the South Korean embassy in Washington, D.C., via email with a request for comment.
What To Know
Critics say the mandatory retirement ages, forced wage cuts for older employees and reemployment programs that shift retirees into lower-paid, insecure roles reinforce ageist stereotypes and undermine the dignity and rights of South Korea’s older population.
South Korea’s “peak wage” system lets employers reduce wages by as much as 50 percent in the years leading up to mandatory retirement, which is often set at 60.
While the system is meant to encourage companies to hire younger workers, HRW found “no evidence that the government is achieving its aim of hiring younger workers under the peak wage system or that it is monitoring how employers use the savings to this end.”
Instead, many retirees are moved into “non-regular” jobs with lower pay and fewer protections—often earning less than the national minimum wage.
The government’s own Korea Labor Force Development Institute for the Aged reported that more than 70 percent of its placements for older workers are volunteer roles.
The rights group found no evidence that these measures are actually helping young job- seekers or improving productivity, and said they have, in many cases, caused financial and psychological harm.
In addition, the Act on Prohibition of Age Discrimination in Employment and Elderly Employment Promotion specifically exempts mandatory retirement ages from being challenged as discrimination, making it nearly impossible for older workers to contest these practices.
Data from the Ministry of Employment and Labor show older workers earn 29 percent less, on average, than workers 59 and younger.
What People Have Said
Kim Ki-duk, a labor lawyer, told The Guardian, “Simply raising the retirement age to 65 would give companies more years to apply discriminatory wage cuts under the current system.”
Gwon Oh-hoon, a 52-year-old attorney in Seoul, told HRW: “It’s an infringement of human dignity. Just because I’m older, I can’t work where I’ve worked my entire life.”
What’s Next
With the number of retirees rising fast—South Korea’s working-age population is projected to fall by half within 50 years.
The government has discussed raising the retirement age to match the state pension eligibility age—currently 63 and set to rise to 65 by 2033—but labor advocates warn that unless wage structures are also reformed, this may simply extend the period of discrimination.
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