The alarm bell has already sounded that Korea’s demographic evolution, highlighted by the world’s lowest birthrate and the fast pace of aging, will dent the nation’s economic growth.
Some pessimists say that because of the shortfall in the working-age population, Korea may not be able to get out of a protracted period of low economic growth, which may fall to less than 2 percent in the 2030s.
This grim picture raises the importance of fostering the roles of women and senior citizens as key players in the economy. Expanding their economic roles is critical not only to increase their welfare but also to boost the growth potential of the economy.
The reality, however, is very harsh, as illustrated by two recent international reports about women’s economic activity ― one about the female labor force participation rate and the other about the gender wage gap.
Korea’s female labor force participation rate, the proportion of the population aged 15 to 64 that is economically active, stood at 55.6 percent last year, 22 percentage points lower than men’s 77.6 percent.
The rate, cited in a report authored by the International Monetary Fund and the Bank of Korea, is one of the lowest levels among the member states of the Organization for Economic Cooperation and Development. The comparable figure is 72.5 percent for Germany and 65 percent for Japan.
Korean women are less economically active because they still face many barriers and discrimination at work. The wide gender wage gap is one such obstacle. An OECD report showed that Korea’s gap stood at 37.4 percent in 2012, which means women are paid 37.4 percent less than their male counterparts.
This is the highest among 11 of the 34 member states of the OECD surveyed for the report. The gender wage gap in the same year was 26.5 percent for Japan, 19.1 for the U.S., 18.8 for Canada and 17.8 for Britain. New Zealand had the narrowest gap at 6.2 percent.
Korea’s gender wage gap was 40 percent in 2000, which means there has been an improvement of only 3 percentage points in 12 years. In contrast, Japan’s gap fell by 7.4 percentage points from 33.9 percent to 26.5 percent during the same period.
These statistics show that the government and business should put priority on reducing the gender wage gap ― that is raise the wage of female workers ― in order to expand women’s economic participation.
Things the government could do also include, for instance, increasing child care benefits, and tax incentives for part-timers and second breadwinners. Businesses should stamp out workplace discrimination against women in recruitment, promotion and training, and offer flexible working hours and other incentives.