How minimal social security forces elderly Koreans to work past retirement age
South Korea’s meagre social welfare payments force many pensioners to keep working after they reach 60. Park Jae-yeol, 71, says the pension payments are barely enough for pocket money, so he has to remain part of the workforce
One of millions of elderly South Koreans pushed into working well past the official retirement age of 60, Park Jae-yeol should have retired 11 years ago. Unable to survive on stingy South Korean state pensions, the 71-year-old must keep working, delivering packages to high-rise flats.
He pushes a cartload of brown boxes into a lift at a block of flats in Seoul, his ageing eyes strained by constant squinting at tiny address labels.
“Money is the biggest reason” for continuing to work, says Park.
Social safety nets in the rapidly ageing country are weak, despite South Korea being a developed country. It’s a situation with which elderly Hongkongers will be wearily familiar.
More than 45 per cent of elderly South Koreans live in relative poverty – defined as surviving on less than half of the median household income – by far the highest proportion in the Organisation for Economic Cooperation and Development, where the average is 12.5 per cent. (In Hong Kong, one in three elderly Hongkongers live in poverty, 436,400 of them in 2014.)
Park is one of millions whose efforts powered the “Miracle on the Han”, the country’s transformation from a war-ravaged ruin in the 1950s to the world’s 11th largest economy.
A high school graduate from the southern port of Busan, he worked in air conditioning maintenance, earning enough to raise three children and buy a flat in Seoul.
He formed his own air conditioning servicing company, but like many people of his age was never able to build up a cushion of savings for his twilight years.
“Our generation was too busy just trying to survive and raise children during these crazy times, unable to prepare for our post-retirement years,” says Park.
South Korea only introduced a national pension scheme in 1988 and it did not become mandatory until 1999. Payouts are dependent on the amount and duration of contributions, with a 10-year minimum.
“Many of those in their 70s and 80s missed a chance to pay into the system so are left out of pension benefits,” says Hwang Nam-hui, a researcher at the Korea Institute for Health and Social Affairs, and must survive on welfare payments that are “ludicrously low”.
Park’s firm went bankrupt in 2012, leaving him having to rely on a national pension of about US$130 a month and an elderly subsidy around US$180 – “nowhere near enough” to live on in one of the world’s most expensive cities.
“That’s not even enough for pocket money,” he says.
So he signed up for a state programme to help the elderly get menial jobs, and started working as a delivery man in 2014.
He now works three days a week, taking up to 100 packages to their destinations and earning about US$500 a month.
Most of his colleagues are in their 70s, the oldest is 78.
Park has already worked for more than five decades, but says he hopes to carry on “as long as my health allows … maybe until I’m 80”.
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South Korea’s fertility rate – the average number of babies women have in their lifetime – hit a record low of 1.05 last year, far below the replacement rate of 2.1.
Over-65s are expected to make up 25 per cent of the population by 2030 – a phenomenon dubbed the “silver tsunami”.
In the past, traditional extended family structures, with three generations living under one roof, ensured the elderly a life of relative comfort with support from their offspring, says Hwang.
But the radical social changes of recent decades have seen filial obligations wane, and the elderly forced to remain in work.
Statistics released in March showed more South Koreans in their 60s were economically active – either employed or seeking a job – than those in their 20s.
Park and his 63-year-old wife – who works as a convenience store cashier – take only one week off a year, to go to the resort island of Jeju.
But, Park insists: “I feel so grateful and lucky to still be able to work.”