Labor unions push for mandatory retirement age hike this year as Lee government weighs youth jobs dilemma

Forum on raising the statutory retirement age to 65 and legislative reform

Labor: 'Income gap for workers born in 1967–68 must be addressed'

Business: 'Concerns over deepening dual structure in labor market'

Academia: 'Government and ruling party moving too slowly; constitutional challenge possible'

Democratic Party's special retirement age committee to unveil bill by end of month

Ryu Ki-seop, secretary-general of the Federation of Korean Trade Unions, delivers opening remarks at a National Assembly forum on raising the statutory retirement age to 65, held at the National Assembly members' office building on Tuesday. [Yonhap]

Political discussions over raising the mandatory retirement age to 65 — widely seen as the biggest labor legislation issue in the second half of this year — have resumed following the June 3 local elections. Amid the renewed debate, labor unions are intensifying pressure on the Lee Jae Myung government and the ruling party, demanding that legislation to extend the retirement age be passed without further delay.

While the government and the Democratic Party of Korea broadly support raising the retirement age in principle, both appear caught in a dilemma as economic uncertainty deepens youth unemployment concerns and adds to the burden on businesses. The Democratic Party's special committee on retirement age extension is expected to release a draft bill as early as the end of this month.

On Tuesday, the Federation of Korean Trade Unions and the Korean Confederation of Trade Unions jointly hosted a National Assembly forum titled "Issues and Legislative Reform Directions for Raising the Statutory Retirement Age to 65," together with Democratic Party lawmakers Park Hong-bae and Lee Yong-woo and Progressive Party lawmaker Jeong Hye-gyeong.

At the forum, labor representatives sharply criticized the government and ruling party for having originally pledged to pass retirement age legislation by the end of 2025, demanding that "the bill be enacted this year without further delay citing political or economic circumstances."

Ryu Ki-seop, secretary-general of the Federation of Korean Trade Unions, said the income gap between retirement and the start of pension payments "is directly tied to the structural reality that South Korea ranks first among OECD nations in elderly poverty," adding that "extending the retirement age is the most direct and fundamental solution to bridging that gap."

Han Seong-gyu, vice chairman of the Korean Confederation of Trade Unions, said that if the retirement age were raised in phases starting in 2029 — as some reports have suggested — "workers born in 1967 and 1968 would inevitably be left with an income gap." He also said he had "deep concerns" that allowing adjustments to working hours and wage structures for workers covered by the extension "could in effect shift the burden onto workers."

Kim Dong-myung (fourth from left), chairman of the Federation of Korean Trade Unions, and Yang Gyeong-su (third from left), chairman of the Korean Confederation of Trade Unions, call for legislation to raise the retirement age to 65 at a joint press conference at the National Assembly press room on June 16. [Yonhap]

In the panel discussion that followed, Lee Jeong-hee, policy director of the Korean Confederation of Trade Unions, said "the root cause of worsening youth employment is not the retirement age extension but the expansion of irregular work and a shortage of quality jobs," arguing that "young people should not be used as a pretext to oppose raising the retirement age."

The business community pushed back, saying it agreed on "the need to expand older workers' participation in the labor market and make use of their skills and experience," but insisted that "employment arrangements and wage levels must be designed to fit the current conditions of individual companies and industries."

Lee Sang-cheol, head of employment and social policy at the Korea Employers Federation, said a uniform statutory retirement age extension "would concentrate its benefits on large companies and unionized regular workers, deepening the dual structure of the labor market, reducing new hiring of young workers, and raising labor costs for businesses." He added that "employment security for older workers is difficult to achieve simply by raising the retirement age."

Lee said the statutory retirement age should remain at 60, with a special law and government support built around a post-retirement rehiring system that allows companies to flexibly set eligibility and working conditions on a case-by-case basis.

Academics at the forum said the government and ruling party had been too slow in advancing the retirement age debate, urging them to "focus on building social consensus while also moving faster on legislation."

Jung Heung-jun, a professor of business administration at Seoul National University of Science and Technology, said the government and ruling party had been "somewhat passive on retirement age extension over the past year in power due to economic and political reasons," but added that "they cannot keep putting it off until the 2028 general election, which will serve as a midterm assessment." He said they face "a time constraint to present a concrete implementation plan by the end of this year, or at the latest by early next year."

Jung said raising the statutory retirement age to 65 is necessary to address the income gap between the current mandatory retirement age of 60 and the age at which national pension payments begin, as well as the decline in the working-age population. "If an agreement is reached this year and preparations are made in 2027, implementation could begin as early as 2028," he said.

He outlined four criteria for a tripartite agreement on retirement age extension: reaffirming a phased implementation of the statutory retirement age increase; designing the system to minimize the income gap; accounting for the impact on youth employment; and considering the financial burden on businesses.

He also said it would be advisable to scrap the wage peak system, which he said has proven largely ineffective, and called on the government and ruling party to implement the retirement age extension in phases while "making sure to develop measures to protect youth jobs and promote cooperation between large and small and medium-sized enterprises."

Meanwhile, Noh Ho-chang, a professor of law and police administration at Hoseo University, said that if the retirement age is raised by law, workers born in certain years who fall outside the scope of the new rules "may file constitutional complaints on the grounds of unreasonable discrimination and violations of the right to equality."

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