amongst the 38 oecd nations south korea
has the highest rate of elder poverty
46 of their citizens age 65 or over live
in relative poverty this rate is
unusually high almost an outlier
the next highest rates belong to estonia
and latvia with lithuania and mexico
next
japan a fellow aging east asian economy
is at 20 percent and the oecd average is
about 12 to 13
korea is one of the world's richest and
most advanced countries their gadgets
are sleek and their movies are slick
korean history is deeply steeped in
confucian traditions where respecting
the elderly is paramount so how did this
happen
in this video we're going to look at
south korea's elder poverty problem a
problem that is getting increasingly
worse
before we go any further we need to
first acknowledge that the problem
actually exists after my squid game
video i got more than a few emails
telling me that everything was fine in
korea they strongly denied that korean
poverty existed and i needed to stop
reading non-korean sources
poverty is defined by the oecd as when a
person's income falls under half the
median household income of the total
population
rising elder poverty rates are part of a
general trend of rising poverty across
the entire korean population
in 1996 8.8 percent of korea's people
suffered poverty as of 2019 that
percentage is now 16.7
amongst older adults the number has gone
up from 28.7
in 1996 to 40.8 percent in 2014 and the
after mentioned 46
in 2019.
there is no one reason why elder poverty
is so prevalent in korean society rather
there are a number of reasons reflecting
multiple failures in the social net
let us first look at their working
income
in korea many elders still work and the
jobs they work are pretty terrible
in general elders are at a high poverty
risk most of them are unable to continue
working as they age in the oecd the
average employment rate for those age 50
to 74 is about 50
in korea that number is 62 percent
that number has only grown in the past
few years
elder koreans keep their jobs for far
longer than their oecd peers working
until their early 70s some 33 percent of
the country's population age 70 to 74
are still working over twice as high as
the oecd average of 15 percent
this is in part due to early retirement
policies that saw most workers leave
their jobs in their 50s
but upon retiring from their main career
korean seniors often experience a
drastic drop in income a drop serious
enough to force them to start a second
career one that can last another 20
years or longer now
work participation among seniors is not
necessarily a bad thing after all a lot
of older people find themselves
struggling to adjust to retirement idle
hands can lead to worse attitudes and
depression the problem is that many
korean elders work because they must in
a 2016 study nearly 60 percent say that
their primary reason for working is to
earn living costs
less than 10 percent say they do it to
stay occupied or to stay healthy
furthermore the quality of the work
accessible to them is very poor because
many of these people came of age in a
different time they are not well
educated less than 20 percent of them
have a university degree as of 2016.
thus many of them are only qualified to
hold low wage and low skilled jobs in
other words jobs of a precarious nature
mostly in the service sector which means
retail transportation
accommodation restaurants and business
facility management
they work longer hours than their peers
but mostly in part-time or temporary
jobs which they don't stay in for very
long
33 of elders aged 55 to 64 hold down an
individual job for less than a year
they are your street vendors
disinfection service providers security
guards and cleaners
these are not jobs that a retired person
looking to keep themselves busy would
take
it can be argued that korean elders are
not exactly living the high life so
despite their precarious employment
status and low earnings they probably
can make due with regards to daily
living expenses
the key issue however would be living
arrangements housing
up until recent years elder parents
lived with their adult children usually
a married eldest son
in 1990 the share of adults aged 65 or
over living with married adult children
was 67
this can be considered a form of
privately provided pension accordingly
so during korea's developmental years
many couples use their savings on the
educations and marriages of their
children with the expectation that their
children will in turn support them in
their declining years a confucian
tradition
however attitudes have changed and the
youth are having troubles of their own
too thus the share of seniors cohabiting
with their adult children has declined
to just 32 in 2015.
and the percentage of older adults
living apart from their children went up
from 17 in 1990 to nearly 60
in 2015.
this is an old stat from 2005 but when
asked 42 of korean elders attribute
their poverty to the money they spent
supporting their children
i don't want to say that the adult
children are horrible people seventy
percent of korean elders still receive
money from their children
they're doing their best
even so
what they get makes up less than 25
percent of their already low income less
than 331 usd a month in one sample
the opinion of the adult children has
generally been that responsibility for
taking care of the elders should be
shared amongst all parties the
government adult children and the elders
themselves hard to disagree with that
the third major income source for people
in their old age are transfers from
other parties in other words a pension
there are two types of pensions those
from private companies and those from
the government
early on korea's pension systems
mirrored that of japan the assumption
would be that a worker would have income
from an occupational pension provided by
a large conglomerate ichibl the
government would provide a second public
pension but that would just be a garnish
rather than the main course
korea's system is in contrast to the
public pension systems of china and
taiwan where the government provides the
majority of penchant old age income
singapore and hong kong for their part
run their retirement systems kind of
like 401ks with provident accounts
financed by both the workers and their
employers
singapore's 401k for instance is called
cpf
so if they're running similar systems
then why are korea's elderly poverty
rates still so much higher than japan's
two reasons the first reason is that
private pensions failed to live up to
their name
following the 1997 asian financial
crisis the korean government revamped
corporate pensions there were suddenly a
surge of bankrupt companies unable to
pay the pensions they had promised to
their employees
and the employees had little recourse to
recover that lost income
the government had passed the national
pension insurance act to try to make up
for the lost income but the scale of the
1997 crisis forced them to reduce the
pension income replacement ratio from 70
percent in 1988 to 40 in 2007.
this policy also disadvantages working
elder women because pension benefits are
calculated from lifetime career earnings
and housewives experience career
interruptions due to child raising
the second reason for korea's relatively
higher elder poverty rates compared to
japan has to do with the immaturity and
general inadequacy of korea's public
pensions
with families and the private sector
unable to fully support the elders by
themselves it is up to the government to
pick up the slack there are three major
public transfer programs in south korea
the national basic livelihood security
which has provided cash and in-kind
benefits since 2000
the national pension scheme first
introduced in 1988 is the country's
major social insurance scheme
and a tax-financed pension called the
basic old age pension scheme or bps it
is not funded by contributions and has
been around since 2008. as of 2021 it
has provided about 252 usd a month of
supplemental income
the bps system in particular has been
the most effective of the three in
reducing elder poverty which makes sense
since it is the most broadly targeted
distributing to 70 percent of korean
elders or 4.9 million
elders the major problem with these
programs is that they only provide a
modest level of income the impact is not
big enough to affect the overall poverty
level
and as korean society continues to age
the government will have an increasingly
harder time finding the money to fund it
the military personnel and government
employees pensions are already in a
deficit
japanese pensions have had more years to
mature and develop which is why japanese
elderly are able to receive 80 of their
income from pensions
korea's rapid development has not given
it enough time to do the same
korea is also one of the world's most
rapidly aging countries the population
ratio of the elderly has gone from just
5 in 1990 to 13
in 2005 to 16.5 in 2021.
furthermore it is estimated that by 2050
43.9 percent of the country will be
elderly people
this aging trend is mostly driven by a
decline in fertility in other words
there are not enough young people being
born
south korea's total fertility rate has
not gone above 1.3 since 2002
and the speed with which that fertility
rate has crashed is frightening
this is worsened by underemployment
dynamics in what remains of the south
korean youth population in south korea
both the young and the old find that the
only jobs available to them pay very
little and are not stable
unable to support a family or buy a
house with these jobs the young opt to
go back to school their delay into the
working force further constricts the
economy's ability to fund the growing
fiscal burden of supporting elderly
pensions
it also jacks up the price of private
education and exacerbates the korean
over-education problem
private education costs in korea are so
high that certain economic models
actually favor lower birth rates over
lower mortality rates for at least the
next 20 years
the old on the other hand have no choice
but to take up these jobs these are 70
year olds doing work meant for 20 year
olds they are treated as such too which
to me is pretty sad
so what can be done about it in the
short and medium term nothing can be
done to keep the elderly poverty from
needing to work thus the goal would be
to improve the working conditions for
those service level jobs
certain accommodations will need to be
made to better suit the elderly
including vocational training and job
creation programs
over the longer term the korean
government should look to find some way
to fund and improve the social welfare
net
japan is the only east asian country
where its elders do not rely on their
children for the majority of their
income
with fertility rates crashing the way
they are across the world i think
confucian-styled governments need to
re-evaluate the expectation that the
elders to come will be supported by
their children it would not be fair to
them or anyone else
elder poverty is a problem that almost
all the aging east asian economies must
face in the coming years
china korea both north and south taiwan
hong kong vietnam thailand and the
philippines this is all coming for them
i myself out in taiwan cannot help but
notice the large number of aging seniors
sorting my trash sweeping my streets and
cooking my food
even after many years they are still
working
i know the concept of retirement is a
relatively recent one but if you ask me
this is no way to treat the people who
have built up the country to what it is
today
yet the situation is complicated and the
simple solutions are fiscally
unsustainable
alright everyone that's it for tonight
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