▲ Korea Enterprises Federation (KEF)
The Korea Enterprises Federation (KEF) has argued that rather than uniformly extending the statutory retirement age, a step-by-step approach centered on re-employment is necessary to expand employment for older adults.
In a report titled "Japan's Retirement Age Extension Cases and Implications" released today (October 11), the KEF introduced Japan's case where the statutory retirement age was maintained at 60 while guaranteeing employment opportunities up to 65 primarily through re-employment.
In March, the KEF visited the Japanese Ministry of Health, Labour and Welfare, Nippon Keidanren (Japan Business Federation), and local companies to investigate Japan's elderly employment policies, as well as the background and current status of introducing measures to secure employment for older workers.
According to the report, considering youth unemployment and corporate burdens at the time of the legal amendment in 2004, Japan introduced measures to secure employment for older workers up to age 65 centered on re-employment, instead of extending the statutory retirement age.
Japan has gradually made the 65-year-old employment security measures mandatory starting in 2006.
The mandate to re-employ all willing workers was expanded in phases starting in 2013 and has been fully applied since last year.
In Japan, the burden of expanding employment for older adults was also shared among labor, management, and the government.
Workers accepted wage cuts during the re-employment process, companies reorganized their wage systems, and the government subsidized part of the wage reductions.
As of 2010, the average wage of re-employed workers stood at 68.4% of the level right before retirement.
Japanese companies also redesigned jobs and introduced performance-based compensation systems.
One company expanded wage differentiation based on performance and used the secured financial resources to improve the treatment of re-employed workers.
Another company redesigned jobs prior to retirement by taking into consideration workers' health conditions, expertise, and organizational demands.
The KEF explained that Japan achieved social consensus by simultaneously considering labor market conditions and corporate burdens during the implementation of its elderly employment policy, thereby enhancing corporate participation and institutional acceptability through phased legislation.
It also stated that in the process of revitalizing employment for older workers, the reorganization of a duty- and performance-based wage system played a crucial role in alleviating companies' labor cost burdens and continuously utilizing older human resources.
The KEF emphasized that while the need to utilize older human resources is also growing in South Korea, the country must approach retirement age extension with caution, taking into account high wage seniority, labor market rigidity, and youth unemployment.
Lee Sang-chul, head of the KEF Social Policy Division, said, "If the retirement age is uniformly extended, the burden will directly lead to a contraction in youth employment and the deepening of the labor market's dual structure." He added, "There is an urgent need to design a flexible, re-employment-centered system that prevents clashes with youth employment and guarantees companies' autonomous choice."
(Photo provided by KEF, Yonhap News)
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