Mandatory rehire could be policy option in aging Korea

Mandatory rehire could be policy option in aging Korea

최초입력 2025.05.09 10:01:07

(Yonhap)

South Korea’s Presidential Economic, Social & Labor Council released a proposal on Thursday, recommending mandatory reemployment of senior workers after retirement as a measure to promote continued employment among the older age group.
The idea is to allow those who wish to keep working beyond the statutory retirement age of 60 to sign new employment contracts and be rehired. The proposal emerged as a compromise following a breakdown in negotiations between labor and management, with labor representatives calling for an extension of the retirement age and management favoring selective reemployment.
The Council members’ decision to reject a blanket extension of the statutory retirement age is widely regarded as a reasonable assessment.
According to the Bank of Korea, since the introduction of the 60-year retirement age in 2016, each additional senior worker has displaced between 0.4 and 1.5 younger workers. Extending retirement without addressing the seniority-based wage system has increased labor costs for companies and dampened youth employment.
The Council’s proposal takes these issues into account by allowing exceptions to reemployment in cases involving health concerns, underperformance, or organizational downsizing.
It also stresses that wages should reflect productivity and be determined by role, responsibilities, output, and performance. This approach acknowledges the constraints of the existing pay structure. In addition, the proposal permits large corporations and public-sector employers to retain older workers by transferring them to affiliated companies. This aims to preserve new hiring opportunities in positions preferred by younger job seekers.
In a super-aged society, continued employment is not merely an option but a necessity. It offers a path to alleviating labor shortages, closing pension gaps, and reducing elderly poverty. The Bank of Korea estimates that extending working life to age 65 could lift Korea’s growth rate by 0.9 to 1.4 percentage points over the next decade.
Although the proposal does not offer a complete solution, it provides a meaningful foundation for broader social dialogue. The four principles that must underpin any effective system design—protecting youth employment, enhancing productivity across the public and private sectors, easing labor market dualism, and ensuring active engagement by labor and management—will determine the long-term success of any continued employment policy.
Presidential candidates cannot afford to overlook this challenge. In a super-aged society, the future is already the present. Labor policy must begin to change now.
[ⓒ 매일경제 & mk.co.kr, 무단 전재, 재배포 및 AI학습 이용 금지]

매일경제

Mandatory rehire could be policy option in aging Korea

많이 본 뉴스