South Korea's wages depressed as baby boomers delay retirement
By Choonsik Yoo
ANSAN, South Korea (Reuters) - South Korea's Puretech Co, a small supplier of mobile phone components, has a workforce increasingly made up of aging baby boomers.
The company in Ansan, an industrial city near Seoul, finds older workers useful in marketing, advisory roles, and in quality control. The work scene is a reflection of the demographics of South Korea, which like Japan, is rapidly aging.
South Korea's legion of older workers has helped keep the jobless rate low but has exacerbated record low employment among the young - less than half of those aged 15 to 29 have jobs. It is also a cause of the decade-long stagnation in wage growth, dampening consumption.
Kim Yeon-soon, 55, joined the company last year and leads a dozen workers who manually check final components bound for tech firms such as Samsung Electronics. She retrained for production work after various jobs, including social work.
"This is a new type of work, but I thought working at a different job would be fun and I am now enjoying the work."
Given high household debt and a poor welfare system, older employees such as Kim are willing to adapt to keep working.
"Elderly people are so aggressive and desperate in seeking employment after losing jobs that they are willing to take low-wage jobs even at factories that young people avoid," said Park Chang-in, head of the Korea Labor Foundation's job transfer service team.
As wages stagnate, households spend less. Consumption is lagging overall growth despite government efforts to ease the $1.4 trillion economy's reliance on exports. Household spending as a percentage of GDP has been declining since 2006, though domestic consumption has increasingly fueled neighboring economies. Continued...