Union: “Please increase the retirement age to 64”… What companies are concerned about

The Hyundai Motors branch of the Korea Metal Workers’ Union, the largest single labor union in Korea, pointed out extending the retirement age as an important agenda for this year’s wage and collective bargaining. As life expectancy has increased and the time to receive pension is later than retirement age, the request is to increase the retirement age to 64. In addition to Hyundai Motors , unions at Kia, POSCO, and HD Hyundai affiliates included extending the retirement age as a key task in their demands for collective wage negotiations this year. Some of them are prepared to go on strike if the retirement age extension is not accepted.

The company’s position is difficult. The retirement age currently set by law is 60. The need to hire older people is recognized, but increasing it through negotiations between labor and management is a different matter. In addition, increasing the retirement age under the current labor system places too much of a burden on companies in terms of wages and employment flexibility. There are also concerns that youth employment may worsen.

Therefore, conflict between labor and management over employment of the elderly is bound to intensify. This is not simply a situation where labor and management are in a tug-of-war over jobs. Most statistics related to the elderly in Korea indicate that there is an urgent need to address employment of the elderly. According to the National Statistical Office, the number of people aged 65 or older in Korea last year was 9,018,000, or 17.5% of the total population. In 2025, the proportion of the population aged 65 will exceed 20%, and by 2050, it will exceed 40%. In addition, Korea’s elderly poverty rate is 38.9%, which is significantly higher than the Economic Co-operation and Development ( OECD ) country average (14.9%) as of 2020 . This is a situation where a solution must be found somehow.

The union is optimistic that the employment problem of seniors will be resolved once they can work stably and for long periods of time. However, the opinions of the business community are different. Most domestic companies have a seniority-based wage system. The business world’s view is that if the retirement age is increased, the burden on companies will become too large and they will lose competitiveness. According to the Korea Employers Federation (KEF), more than half of workplaces with more than 100 employees are still operating the salary system. If limited to workplaces with 1,000 or more employees, the figure reaches 70%.

The side effects experienced after the retirement age was extended to 60 in 2017 are also one of the reasons why companies are unable to accept the retirement age extension. If the legal retirement age is extended, it becomes more스포츠토토 difficult for companies to reorganize their workforce structure. After the retirement age was extended once, many companies believe that labor rigidity has increased and that global competitiveness has become problematic. In addition, the business community believes that youth employment has decreased, especially in companies that had a large wage burden. It is difficult for companies, which must also take care of stable jobs for young people, to accept an extension of the retirement age.

The government recently launched the ‘Continued Employment Research Group for a Super-Aging Society’ through the Economic, Social and Labor Committee (Economy, Social Affairs and Labor Committee) and decided to discuss the issue of continued employment of the elderly in connection with the reform of the wage system and announce the results in the second half of the year. Continuous employment refers to allowing employees to continue working even after reaching retirement age, and is a concept that includes extension or abolition of retirement age and re-employment.

The Social Security and Labor Committee said, “If Korea, which has a large proportion of the baby boom generation, does not respond well to rapid aging, not only will the growth rate decline, but the national financial burden may snowball,” adding, “There are various ways for the elderly to continue working, but as the labor group argues, it is simply a matter of law.” “If the retirement age is extended, it could become a major barrier and despair for young people seeking employment,” he said.

Cho Joon-mo, a professor of business administration at Sungkyunkwan University, said, “We must resolve the issue of employment of the elderly in a way that takes both the young and the elderly into consideration. Rather than insisting only on the aspects that are advantageous to each other, labor and management must come together and talk responsibly to find an agreement.”






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