The business community is increasingly concerned about the government and ruling party pushing for legislation to extend the retirement age within the year, without sufficient discussion.

Compared to Japan, which introduced a retirement age of 65 and has been solidifying the system over a long period with broad social consensus, the current discussions, focused on passing legislation within the year, are likely to exacerbate side effects, it is argued.

Job seekers waiting to apply for unemployment benefits at the Seobu Employment Welfare Plus Center in Mapo-gu, Seoul. Yonhap News. 

According to the National Assembly Research Service and the Korea Chamber of Commerce and Industry on the 9th, Japan has been implementing its continued employment system for the elderly, which mandates employment until age 65, in three stages over 25 years, from 2000 to the present.

The system was gradually implemented to minimize the burden on businesses and side effects, with stages set as follows: 2000-2005 for efforts to extend employment to 65, 2006-2012 for mandatory extension of employment for selective individuals, and 2013-2025 for mandatory extension of employment for all who wish it.

Furthermore, to extend employment to age 65, businesses were given the autonomy to choose the most suitable system for their circumstances from options such as abolishing the 60-year-old retirement age, extending the retirement age, or implementing a continued employment (re-contract) system, rather than a uniform extension of the retirement age.

There were no regulations on maintaining working conditions or the extent of wage reduction, allowing businesses to determine wage levels.

The job market conditions at the time of pushing for retirement age extension were also significantly better in Japan compared to Korea.

According to a survey by the Korea Chamber of Commerce and Industry, in 2023, the new job openings ratio in Japan, which indicates the number of available jobs per job seeker, was 2.28.

However, at the same time, Korea's new job openings ratio was a mere 0.58, one-fourth that of Japan, indicating a severe shortage of jobs.

The business community's stance is that to successfully implement employment extension for those over 60 without adverse effects on the labor market, a gradual and autonomous employment extension system should be introduced.

Recently, the Korea Employers Federation (KEF) proposed the enactment of a separate law to promote the re-employment of older workers.

Additionally, there are calls for a phased implementation of the system, including selective employment extension through labor-management agreements following employment extension efforts, to ensure that the practical benefits of retirement age extension are concentrated among regular employees of large corporations and do not exclude young people and non-regular workers.

There are also suggestions that various methods for employment extension should be introduced, taking into account the different workforce situations of each company.

Press conference by the two major labor unions urging the passage of legislation to extend the statutory retirement age to 65 within the year. Yonhap News. The business community has expressed concerns that if the goal of legislation within the year is pursued without such supplementary measures, it could deepen the dual structure of the labor market and, consequently, undermine the growth engine of the Korean economy.

One company official stated, "Large corporations typically hire between 4,000 and 10,000 people annually. If the retirement age is extended by five years, an additional 20,000 to 50,000 people will remain with the company during that period. Even setting aside wages, if we consider just 2 pyeong of office space per person, that amounts to up to 100,000 pyeong per company, roughly the size of 40 to 50 soccer fields. Are there any plans for this?"

In its report, the National Assembly Research Service stated, "Retirement age extension requires broad social dialogue beyond the existing labor, management, and government framework to reach sufficient consensus, and phased and gradual implementation that considers company size and industry-specific characteristics is necessary. Simultaneously, adjustments to wages and working hours, customized policy support, and monitoring of the impact on youth employment must be comprehensively integrated to minimize side effects and ensure a smooth transition."

Yonhap News