South Korea: Older Workers’ Low-Paid, Precarious Work – Human Rights Watch

Report on Age-Based Employment Discrimination in South Korea and its Impact on Sustainable Development Goals

Introduction and Summary of Findings

A Human Rights Watch investigation reveals that South Korea’s age-based employment laws and policies are fundamentally discriminatory and create significant barriers to achieving key Sustainable Development Goals (SDGs). The current legal framework, which includes a mandatory retirement age and a “peak wage” system, systematically disadvantages older workers. This forces them out of stable careers and into low-paid, precarious employment, undermining progress on SDG 8 (Decent Work and Economic Growth), SDG 10 (Reduced Inequalities), and SDG 1 (No Poverty). The situation is compounded by an inadequate social security system that fails to provide a sufficient safety net, further challenging the principles of SDG 3 (Good Health and Well-being). This report is based on interviews with 34 workers, consultations with 41 experts, and a review of national legislation and reports.

Violation of SDG 8: Decent Work and Economic Growth

South Korea’s employment policies for older workers are in direct conflict with the principles of SDG 8, which calls for promoting full, productive, and decent work for all. The existing systems deny older individuals their right to fair and favorable working conditions.

Mandatory Retirement and the ‘Peak Wage’ System

The Act on Prohibition of Age Discrimination in Employment and Elderly Employment Promotion permits employers to enforce a mandatory retirement age of 60 or older. This practice is widespread, particularly in the public sector and large corporations. This policy is often coupled with a “peak wage” system, which allows for the reduction of an older worker’s salary in the years leading up to retirement. These systems undermine SDG 8 by:

• Forcing skilled and capable workers out of their primary jobs based solely on age, not ability.
• Reducing wages for older workers, violating the principle of equal pay for work of equal value. A 59-year-old worker reported his income will be reduced to 52% of what he earned at age 55, stating, “It is discrimination because our income has been reduced because of our age.”
• Negatively impacting other financial entitlements, including pension contributions, severance pay, and unemployment benefits.

Failure of Re-Employment Programs

While the government has a responsibility to support re-employment, existing programs fail to secure decent work for older individuals. Instead, they contribute to occupational segregation, a form of discrimination that contravenes SDG Target 8.5 (full and productive employment and decent work for all).

• Re-employed older workers are concentrated in low-paid, precarious roles such as security guards and care workers.
• On average, workers aged 60 and older earn 29% less than their younger counterparts, indicating a failure to provide just and favorable employment opportunities.

Exacerbation of Inequality in Opposition to SDG 10

The legal framework in South Korea institutionalizes age-based discrimination, directly opposing SDG Target 10.3, which aims to eliminate discriminatory laws and policies. The system creates and reinforces inequalities rather than reducing them.

Systemic and Unjustified Discrimination

Under South Korean law, mandatory retirement ages do not require justification and cannot be challenged as discriminatory. The stated aims of these policies—to retain older workers until age 60 and finance youth employment—are not proportionate to the harm inflicted upon older individuals. Alternative, less harmful methods, such as professional development and targeted subsidies, could achieve these aims without violating the rights of older workers, thereby better aligning with the goals of SDG 10.

Disproportionate Impact on Women

These discriminatory policies have a disproportionate impact on women, who often have fewer opportunities throughout their careers to attain seniority, high salaries, and sufficient savings. This exacerbates existing gender inequalities, undermining progress on both SDG 10 and SDG 5 (Gender Equality).

Challenges to SDG 1 (No Poverty) and SDG 3 (Good Health and Well-being)

The combination of forced retirement and an insufficient social safety net pushes older people toward poverty and negatively affects their well-being, hindering progress on SDG 1 and SDG 3.

Inadequate Social Protection Systems

The social security system fails to meet the standards of SDG Target 1.3, which calls for the implementation of nationally appropriate social protection systems for all.

• A significant gap exists between the mandatory retirement age (60) and eligibility for the National Old Age Pension or Basic Pension (65).
• During this gap, individuals are only entitled to unemployment benefits for a maximum of 270 days.
• In 2023, only 40% of people aged 60 and older received a National Old Age Pension, highlighting a critical failure in social protection that increases the risk of poverty.

Impact on Mental Health and Well-being

The experience of being forced into retirement has been shown to cause significant harm to the mental health and well-being of older workers, which is contrary to the objectives of SDG 3. A 59-year-old nurse facing mandatory retirement after 36 years of service expressed this anxiety, stating, “I can’t imagine myself being out of this organization. It would feel like standing by myself on a windy road.”

Recommendations for Alignment with Sustainable Development Goals

To uphold its commitments to the Sustainable Development Goals and protect the rights of all citizens regardless of age, the South Korean government should undertake the following reforms:

1. Abolish Discriminatory Policies: Immediately abolish the mandatory retirement age of 60 or older and the “peak wage” system to ensure compliance with SDG 8 and SDG 10.
2. Reform Re-Employment Programs: Review and restructure re-employment initiatives to provide older workers with equal access to just, favorable, and meaningful employment opportunities that offer at least a living wage.
3. Strengthen Social Security: Revise social security programs to eliminate the coverage gap and ensure that all older people have an adequate income, in line with the principles of SDG 1.
4. Adopt Comprehensive Anti-Discrimination Legislation: Enact a comprehensive law that explicitly prohibits all forms of discrimination, including ageism, to create a legal foundation for achieving the equality targets outlined in SDG 10.

Analysis of Sustainable Development Goals in the Article

1. Which SDGs are addressed or connected to the issues highlighted in the article?

   The article on age discrimination in South Korea’s labor market addresses several Sustainable Development Goals (SDGs) by highlighting issues of employment rights, inequality, social protection, health, and gender disparities.

   • SDG 8: Decent Work and Economic Growth: This is the most central SDG. The article focuses on the denial of decent work to older individuals through forced retirement, wage cuts under the “peak wage” system, and relegation to “low-paid, precarious work.” It directly discusses employment conditions, labor rights, and economic productivity of a specific demographic.
   • SDG 10: Reduced Inequalities: The core theme of the article is discrimination based on age, which is a primary concern of SDG 10. It details how South Korea’s laws and policies create and perpetuate inequality, leading to the social and economic exclusion of older workers. The call for a “comprehensive anti-discrimination law” reinforces this connection.
   • SDG 1: No Poverty: The article links discriminatory employment practices to financial hardship. The combination of forced retirement, reduced income, and an “inadequate social security system” that fails to provide a sufficient safety net puts older people at risk of poverty.
   • SDG 3: Good Health and Well-being: The article explicitly mentions that being forced to retire “harmed older workers’ mental health and well-being,” directly connecting the discriminatory policies to negative health outcomes.
   • SDG 5: Gender Equality: The article points out that these age-based policies have a “disproportionate impact on women,” who have fewer opportunities over their careers to build savings and pensions, thus linking age discrimination to gender inequality.

2. What specific targets under those SDGs can be identified based on the article’s content?

   Several specific SDG targets are relevant to the problems and solutions discussed in the article.

   • Target 8.5: “By 2030, achieve full and productive employment and decent work for all women and men… and equal pay for work of equal value.” The article directly relates to this target by describing how older workers are denied full employment through mandatory retirement and are not given equal pay, as evidenced by the “peak wage” system where their income is reduced “because of our age.” The push into “low-paid, precarious work” is the opposite of decent work.
   • Target 8.8: “Protect labour rights and promote safe and secure working environments for all workers… and those in precarious employment.” The article highlights the violation of older workers’ rights through discriminatory laws and their subsequent concentration in precarious jobs like security guards, which lack the security of their former main jobs.
   • Target 10.2: “By 2030, empower and promote the social, economic and political inclusion of all, irrespective of age…” The article’s entire premise is about the economic and social exclusion of workers based on age. The policies described, such as mandatory retirement, actively disempower and exclude older individuals from the workforce.
   • Target 10.3: “Ensure equal opportunity and reduce inequalities of outcome, including by eliminating discriminatory laws, policies and practices…” This target is directly addressed by the article’s call to “abolish the mandatory retirement age of 60 or older and peak wage system,” which are identified as discriminatory policies that create unequal outcomes for older workers.
   • Target 1.3: “Implement nationally appropriate social protection systems and measures for all… and by 2030 achieve substantial coverage of the poor and the vulnerable.” The article criticizes South Korea’s “inadequate social security system,” noting that workers forced to retire at 60 may wait up to five years for a pension and that “only 40 percent of people 60 and older received a National Old Age Pension” in 2023, indicating a failure in coverage and protection.
   • Target 3.4: “By 2030… promote mental health and well-being.” The article provides evidence for this target by stating that forced retirement “harmed older workers’ mental health and well-being,” citing the testimony of a nurse who felt it would be like “standing by myself on a windy road.”
   • Target 5.1: “End all forms of discrimination against all women and girls everywhere.” The article’s finding that ageist policies have a “disproportionate impact on women” connects the issue to this target, as the system indirectly perpetuates gender-based economic discrimination.

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

   Yes, the article provides several quantitative and qualitative indicators that can be used to measure the extent of the problem and any progress towards the targets.

   • Policy Indicator: The existence of a “mandatory retirement age of 60 or older” and the “peak wage” system are themselves indicators of discriminatory policy (Target 10.3). Abolishing them would be a measure of progress.
   • Wage Gap Indicator: The article states that on average, “workers 60 and older earn 29 percent less than younger workers.” This statistic is a direct indicator for measuring wage inequality based on age (Target 8.5).
   • Income Reduction Indicator: The specific example of a worker who at retirement will “earn just 52 percent of what he earned at 55” serves as an indicator of the financial impact of the “peak wage” system (Target 8.5).
   • Social Protection Coverage Indicator: The statistic that “only 40 percent of people 60 and older received a National Old Age Pension” in 2023 is a clear indicator of the coverage and adequacy of the social security system (Target 1.3).
   • Social Protection Gap Indicator: The gap where retirees receive unemployment benefits for “up to 270 days” but may have to wait up to five years (from age 60 to 65) for a pension is an indicator of a systemic flaw in social protection (Target 1.3).
   • Occupational Segregation Indicator: The observation that re-employed older workers are “concentrated in low-paid occupations, such as security guards and care workers” is a qualitative indicator of age-based occupational segregation and the prevalence of precarious work among this group (Target 8.8).

SDGs, Targets, and Indicators Summary

Source: hrw.org