Why South Korea’s Seniors Are So Poor: a problem with many causes but few solutions

“Why South Korea’s Seniors Are So Poor” (Asianometry, 19 April 2022)

The statistics – and this mini-documentary is full of them! – are alarming: the relative poverty rate among people aged 65+ years in South Korea is the highest among the OECD nations, at 46% in 2019 according to this video or 43% in 2019 according to Statista.com. Why this is so, especially as South Korea is a wealthy and technologically advanced nation with a Confucian-influenced culture that values respect for the elderly, is explained in considerable detail. The rise in elder poverty since the late 1990s is part of a rising trend in poverty across the South Korean population and indicates that the social welfare net (or what passes for one) in South Korea is failing. There are many factors in the South Korean economy and society that force, rather than encourage, older people to work, even after many of them have retired from previous employment.

The mini-documentary notes that many older people came of age in a very different time in South Korea, when education was not so important and unskilled work was more widespread. Most older people have had much less education and have few portable employment skills so the work they do is usually poorly paid and precarious. Their working conditions are often also poor, even unsafe, and their working hours may be long. Many of these people spent their savings on their children’s education and marriages with the expectation that their children would support them. However the percentage of elderly people living with their married adult children has been falling over the decades, with that percentage being 32% in 2015. Again the reasons for the fall are many and complex: social attitudes have changed and many young adult Koreans believe that governments, employers, taxpayers and working people themselves, need to share the burden of providing for workers’ futures when they retire.

The pension system in South Korea is explained in some detail and is also contrasted with pension systems in Japan, Singapore and other East Asian nations. In China and Taiwan, the bulk of pension payments is made by those nations’ governments; in Singapore, a worker’s pension fund is financed by the worker himself / herself and his / her employer. South Korea’s pension system is modelled on that of Japan where the bulk of a worker’s pension is financed by his / her employer and the government tops it up. The 1997 Asian financial crisis led the South Korean government to make changes in the country’s pension system that have disadvantaged retirees. As of 2021, three public pension schemes provide additional income to the country’s elders but the money they receive is not enough to cover their costs of living.

The video also calls attention to South Korea’s declining fertility rate and its rapidly ageing population which will further exacerbate the problem of where the money will come from to pay pensions to elderly people. In addition, elderly people are already competing with young people in their early 20s for low-paid and unstable jobs. The documentary concludes by stating that Seoul needs to provide work that is better paid and better suited to the needs of retirees and other elderly people, and that all societies with a historical background of Confucianism cannot assume that adult children will willingly shoulder most of the burden in caring for their elderly parents.

While this is a very informative introduction to a pressing social and economic problem in South Korea, I couldn’t help but notice gaps in much of the video’s narrative. In discussing why the percentage of elderly people living with their adult children has declined so much, the video omits any mention of the cost of living for Koreans living on average wages and how that affects their ability to take care of their elderly parents. With so many Koreans living in Seoul and its metropolitan area, and most of the country’s best universities and other facilities located there, housing is surely going to be the major expense and headache for most people. Checking online, I discovered that, depending on the source, at least 40% of households in Seoul live in apartments: a housing arrangement that would hardly suit the needs of a three-generation extended family. The concentration of people in Seoul and its metropolitan area would make even a small apartment expensive to own.

As in Japan, conservative Confucian attitudes to family – often among government officials, politicians and political parties – may be contributing over the long term to lower fertility rates as women bear most of the burden of looking after their husbands’ parents as well as looking after their own children. As a result, many women either refuse to marry or marry foreign men: a recipe that, if followed by many women in South Korea over generations, is bound among other factors to push fertility rates into decline, unless Seoul enacts policies and programs that spread the burden of looking after the elderly across communities and governments and allow women to work and have families without the added pressure of looking after their elderly relatives.

The issue of elder poverty in South Korea turns out to be a microcosm of much that has resulted from South Korea’s rapid economic development and equally rapid social and demographic changes, with unforeseen and unwanted consequences that have rebounded on the people who worked and gave everything they had to lift their nation from poverty to prosperity. The South Korean government needs to assist families much more if it expects adults to look after their parents and to consider a decentralisation policy to spread industry, employment, infrastructure and facilities to other parts of the country to ease the housing situation in Seoul and allow people to stay in regional areas with their elderly parents in inexpensive housing that accommodates extended families.