According to a study, the population of those Koreans aged 65 and over was 7.2% in 2000. And it will be 14.3% in 2018 and 20.8% in 2026. If 20% or more of the total population is 65 years and over, the society is called 'a super aging society'. It took 156 years for France to become a super aging society (the population 65 years old and over went up from 7% to 20%) and 36 years for Japan, but shockingly, 26 years for Korea.

A low birth rate and aging population have lead to the depletion of the national pension fund, increasing burden on youths to maintain the welfare system, and labor shortages that could result in the lack of vitality in the society. The relationship between a low birth rate and an aging population could be considered as the head and tail of a coin. If the birth rate increases faster than the population's aging rate, then the percentage of elderly won't increase. Hence, population-related socio-economic problems could be solved if either a low birth rate or aging population could be deterred. It's better to solve both the problems but I'll discuss only the aging issue here.

Aging problems all boil down to supply and demand. Due to an aging population, companies can't secure young labor and begin to seek aging workers. This is evident in countries where a low birth rate and aging have progressed. The demand for old-aged workers is voluntarily created. Therefore, this is no problem.

Solving the aging problems depend on how to satisfy a company's demand for aging workers. That is, we should find ways for elderly laborers to supply their labors. Though we can substitute foreign labor for our elderly labor force, there are two reasons I would not consider the likelihood. First, the absolute number of foreign laborers is restricted by current governmental regulations on them and is unlikely to change in a short time. Second, additional restrictions on the permission system of foreign laborers further limits those eligible to be part of the foreign labor pool.

How can we induce the supply of an elderly labor force? Above all, age restrictions of the current system must be eliminated. In fact, laws have been enacted to forbid age discrimination and age limits on the jobs in the U. S. and the UK so that companies should not discriminate and impose age limits against elderly workers. For example, colleges in America do not set age limits for professors to retire but rather the individual professors can decide when to retire at the end of their contract periods. Of course, many of them voluntarily decide to retire when they get older. To do the suggestion successfully, the salary must be decided by those concluding labor contracts. Therefore, current organizations or public schools that adopt seniority-based salary should introduce complete change into their systems.

If so, will all the problems be solved? No. It is true that the elderly labor force is inferior to the younger laborers in terms of physical strength. Yet, labor work not only involves physical power but discernment, experience, and know-how. In fact, automatization and machines could be the way to offset the lesser physical strength of elderly workers. So elderly workers can complement younger workers in that they can offer better judgement, more experience, and more know-how. In such a system the synergistic effect would be greater for white-collar workers. Thus, companies should be allowed to introduce a "peak wage system" so that they can shoulder the costs of automatization that could offset the weak physical strength of elderly workers.

Utilization of aging laborers greatly benefits not only the individual but also the society by significantly eliminating age-related socio-economic problems. In order to solve certain technical problems, for example, Hyundai Motor Company in earlier times had used at a lower salary aging workers who had retired from Japanese companies. At that time, Japan's aging problem was not full-fledged and foreign companies could utilize their retired workers at low cost.

Conclusively, an aging population (and a low birth rate) should be resolved by both individuals and companies only. It is not a vague 'social' problem whose solution should be financed by the government. Of course, it is the government's responsibility to lift various restrictions that could limit the supply of an aging labor force and also to make the system facilitate the supply.

Jeon, Yoongdeok (Professor of Daegu University, Department of International Trade, ydjeon@daegu.ac.kr)

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