A lot has been going on with the new Korean administration. Cabinet appointments have been contentious and public expectations high. A host of economic policies are on the table but one conspicuous absence remains: a plan for enhancing senior employment.
The issue is simple. With an aging population, Korean social programs will become more burdened to support seniors. Monthly payments will decrease as people leave the workforce and enter retirement. Premiums for those still working will rise and eligibility for benefits will become stricter. Returns on pension investments will be no guarantee, especially given the National Pension Service’s preference for investing in domestic businesses.
Last year, the average monthly benefit (payout) from the NPS was worth about $420. By comparison, the average US social security benefit was worth over $1,200. This is not to say $420 is nothing. There are plenty of people who can, must, and do make it with this amount. But given Korea’s consumer price index is now virtually identical to that of the US, I often wonder how Koreans do it.
Pensions from taxpayer money have limits, both fiscally and politically. What is needed to support such programs is a system for seniors to contribute productively to society while being compensated in a meaningful fashion, supplementing their incomes. As things stand now, such a program does not exist.
The average employer prefers a young worker to an older one. The younger one has more energy, is more likely to obey orders, and can sometimes learn faster. I say “sometimes” because recent research shows younger workers sometimes learn slower than their elders, depending on what the task is. Most employers, unfortunately, are not aware of this so they retain a strong prejudice against older workers, blotting out their potential.
Survey after survey in virtually every country has shown many seniors still want to work and earn money. The problem is most available jobs are full-time affairs or irregular part-time ones requiring long hours. There are few positions with stable, part-time status in Korea, flexible enough to accommodate a more relaxed schedule that seniors need. There are even fewer employers who are willing to accept a potential loss in productivity to hire such workers. But here too, the research shows it’s not as bad as employers imagine. In fact, research shows certain kinds of work are actually done better by seniors.
The best example is elderly care. A number of studies have shown seniors are more responsible, more patient, and more attentive when providing care to other seniors. Despite this improved quality, most Korean companies complain older employees are too slow. I have spoken to a few ex-employees, I know. If one pauses to think for a moment, one can realize quickly this need for speed is actually at odds with care quality. The bathing practices of most nursing homes, for example, are nothing more than impersonal assembly lines with poor seniors being stripped and herded on like cattle, scrubbed with the ferocity of a dirty pot.
On a variety of psychological measures, research shows older workers come out ahead on things like conscientiousness and emotional stability. Another important asset is experience. Germany, already in the midst of dealing with its own aging population, has recently instituted a policy for promoting mixed-age work teams across a variety of industries, with age-specific tasks designed to boost the productivity of seniors. The results so far have been very positive, indicating great potential for this approach in improving overall productivity, for both young and old workers. Japan and the US have since begun instituting similar programs.
To support this kind of innovation in Korea, two things must be done. First, policies must be instituted to recognize a different set of expectations for older workers, expectations governing both usage of time and productivity. Second, some incentive must be devised to encourage employers to give older workers a chance. And this effort must begin soon. Any program of this type takes a decade or two to develop, both in terms of administration but also in terms of culture change. There is no time to waste with the retirement crunch inching ever closer.
By Justin Fendos
Justin Fendos am a professor at Dongseo University in South Korea and the associate director of the Tan School at Fudan University in Shanghai. -- Ed.