A proposal to guarantee a retirement age of 65 for those born in 1972 and afterward was presented at a National Assembly debate hosted by the two major labor umbrella groups. Jung Heung-jun, a professor at Seoul National University of Science and Technology who delivered the keynote presentation at the debate Tuesday, argued that the retirement age should be raised by one year annually from 2028 to 2032 to reduce the income gap for older workers. This would move up the timeline for guaranteeing a retirement age of 65 by four years compared with the plan of the Democratic Party of Korea's Special Committee on Retirement Age Extension, which is reportedly pursuing an extension of one year every two years starting in 2029. Stressing coexistence between retirement age extension and youth jobs, Professor Jung also emphasized the need for an additional quota system in the public sector and the creation of a private-sector job coexistence fund. The labor sector repeatedly demanded legislation to extend the retirement age within the year, stressing that "we must create quality jobs where anyone can work longer."
If the statutory retirement age is extended as the labor sector demands, the burden on companies, which would have to retain all regular workers until age 65, is bound to increase significantly. The Federation of Korean Industries estimates that the increase in employment costs would reach 30.2 trillion won annually. It is obvious that investment for future growth and new youth hiring would shrink accordingly. In a survey by the Korea Enterprises Federation, 52.4% of 500 companies with 30 or more employees said that if a retirement age of 65 is legislated, restructuring of the wage system or a reduction in new hiring would be inevitable. Yet the labor sector strongly opposes the reforms companies demand, such as restructuring the wage system around job duties and performance and labor flexibility. In the end, to avoid labor-management conflict, the only alternative companies can choose is to cut new hiring. This is why concerns are emerging that a uniform retirement age extension could trigger conflict between young people and the older generation.
It is absurd for the labor sector to call for coexistence in words while refusing changes for productivity improvement and labor flexibility, demanding only employment guarantees until age 65. If employment rigidity grows due to uniform institutionalization of a retirement age extension, it becomes difficult to revitalize investment for corporate growth and to create jobs. It is tantamount to taking away opportunities from future generations to build up the vested interests of the older generation. For retirement age extension to be pursued on a foundation of genuine coexistence, the government and ruling party must not be pushed by union pressure but should listen to the voices of companies and young people. A cautious and flexible approach is an essential requirement for achieving social consensus.
