Elderly, Pensions 'Insufficient' Wages 'Low'... The Shadow of 'Highest Elderly Employment Rate'

[Financial News] The employment rate of people over 65 in our country was found to be the highest among OECD countries as of 2023. However, the average monthly pension of pension income earners over 63 was less than 1 million won, which is below the minimum cost of living for a single household (1.34 million won).
The National Assembly Budget Office analyzed in its report 'The Economic Activity Status and Income Gap of the Elderly' on the 27th that the elderly in our country experience a double income gap.
It was diagnosed that pensions are insufficient to maintain post-retirement life, and although they seek reemployment after retirement to compensate for the lack of pensions, the older they are, the lower the wage level, facing another income gap.
According to the report, the wages of wage workers decrease from the age of 55, and pension income falls below the minimum cost of living.
The average monthly wage of wage workers is 3.78 million won at age 55, 3.17 million won at age 60, and 2.21 million won at age 65, decreasing as age increases. The downward trend already starts at age 55.
On the other hand, the proportion of the elderly with private or public pension income to replace wage income is only 23.0% at age 62. At age 63, when the national pension starts, it exceeds half at 51.1%, but the average monthly pension income is less than 1 million won.
The lack of income for retired seniors acts as a factor that forces them to enter the job market, raising the employment rate. Reflecting this, the employment rate of seniors over 65 was recorded at 37.3% as of 2023, ranking first in the OECD. It is significantly higher than the OECD average of 13.6% and higher than Japan (25.3%), a representative aging country.
However, despite the high employment rate, the employment environment for the elderly is poor. 61.2% of wage workers over 65 were non-regular workers. It was found that 49.4% of the employed worked in small businesses with fewer than 10 employees. On the other hand, the proportion of employment in businesses with more than 100 employees decreased with age, from 24.4% at age 55 to 15.4% at age 60 and 9.2% at age 65. By job type, the proportion of simple labor was the highest at 35.4%. The next was machine operators at 15.0%.
The wage gap around the retirement age of 60 was also large. The average wage of wage workers in their early 60s was 20.5% lower than that of those in their late 50s. As of August 2024, the average monthly wage of wage workers was 3.509 million won for those aged 50-59 and 2.789 million won for those aged 60-64. Those in their early 60s who re-entered the workforce after retirement earned 20.5% less than those in their late 50s.
In particular, the decline in the average wage of regular workers who are pushed out of their main job in life and experience career interruptions was significant. Regular workers' wages fell by 17.2% from 4.212 million won in their late 50s to 3.489 million won in their early 60s. Non-regular workers' wages were almost the same at 2.226 million won and 2.205 million won during the same period.
The report stated, "The wage gap around age 60 is largely due to career interruptions caused by leaving the main job in life," and "A multifaceted discussion on support for reemployment of the elderly and solutions to job mismatches is needed."

mirror@fnnews.com Kim Kyuseong Reporter