"Working despite low wages for livelihood" The reality of Korea's top senior employment rate

The employment rate of people aged 65 and over in our country was found to be the highest among OECD member countries as of 2023. However, the average monthly pension for pensioners aged 63 and over was less than 1 million won, falling short of the minimum living cost for a single household (1.34 million won).

The National Assembly Budget Office analyzed in the report 'The Economic Activity Status and Income Gap of the Elderly' released on the 27th that the elderly in our country experience a dual income gap. Pensions are insufficient to sustain retirement life, and retirees seek reemployment to compensate for the pension shortfall, but as they age, they face another income gap due to declining wage levels.

According to the report, the wages of wage workers start to decline from the age of 55, and pension income does not reach the minimum living cost. 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 with age.

On the other hand, the proportion of the elderly with private and public pension income to replace wage income is only 23.0% at age 62. It exceeds half at 51.1% only at age 63, when receiving the national pension begins, but even then, the average monthly pension income is less than 1 million won.

The lack of income for retired elderly acts as a factor that forces them to enter the job market, resulting in an increase in the employment rate. In fact, the employment rate of seniors aged 65 and over was 37.3% as of 2023, ranking first in the OECD. This is much higher than the OECD average (13.6%) and even 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 aged 65 and over were non-regular workers, and 49.4% of the employed were working in small businesses with less than 10 employees. In contrast, the proportion working in businesses with 100 or more employees sharply decreased 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%, followed by machine operators at 15.0%.

The wage gap around the retirement age of 60 was also significant. 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. In other words, the wage of those in their early 60s who were reemployed after retirement was 20.5% lower than that of those in their late 50s.

In particular, the wage decline for regular workers who experience career interruptions after being pushed out of their main job in life was notable. Regular workers' wages decreased by 17.2% from 4.212 million won in their late 50s to 3.489 million won in their early 60s. In contrast, non-regular workers' wages remained almost unchanged from 2.226 million won to 2.205 million won during the same period.

The report emphasized, "The wage gap around age 60 is largely due to career interruptions following the departure from the main job in life," and stressed the need for multifaceted discussions on supporting reemployment of the elderly and resolving job mismatches." mirror@fnnews.com Kim Kyuseong reporter