"Abolish Retirement Age and Introduce Job-Based Pay System"… Saeroun Seontaek Proposes Labor Reform Plan

Abolish Legal Retirement Age Limit and Seniority System
Eliminate Labor Market Polarization through Strengthened Industry- and Multi-Company-Level Negotiations
Enhance Legislative Responsibility with Chair of the Economic and Social Council and Deputy Speaker of the National Assembly Taking Charge

Saeroun Seontaek proposed a 'grand compromise' on the 10th to abolish the retirement age while eliminating the seniority-based wage system. Workers would be able to work longer without a retirement age, but the wage system would be restructured into a job-based pay system, resulting in a lower peak lifetime wage as a form of compromise. The proposal also suggested promoting sectoral and cross-company collective bargaining to reduce wage gaps for non-regular workers in small and medium-sized enterprises.

Jo Seong-ju, co-representative of Saeroun Seontaek, stated at a press conference at the National Assembly that, based on social concessions and a grand compromise, "We propose abolishing both the retirement age and the seniority-based wage system."

[Image source=Yonhap News]

Co-representative Jo announced plans to first pursue reform by eliminating retirement age regulations. He said, "Similar to Japan, we will remove the legal limits on retirement age by extending, abolishing, or continuing employment, thereby guaranteeing dignified work for active seniors," and added, "We will change the productive population statistics from age 64 to 70 to strengthen national management of employment for the elderly." As a measure to encourage employment among older adults, he explained, "To promote employment of older workers, retirement pay obligations under the Labor Standards Act for workers over 60 will be exempted or reduced, and government support for the four major social insurance premiums and employment incentives will be dramatically expanded."

However, in exchange for extending employment, he explained that the seniority-based wage system would be abolished and a job-based pay system introduced. Co-representative Jo said, "We will reform the wage system so that the retirement age reform does not become a privilege for the public sector or large corporations, where wage seniority is strong, known as the primary labor market," and added, "We will restructure the wage system to be job-centered so that workers can work longer; the peak lifetime wage will be lower than the existing seniority-based system, but the total lifetime wage will be designed to be higher." While lowering the peak lifetime wage achievable under the seniority system, the plan aims to increase total lifetime earnings by enabling people to work even as they age.

He also introduced plans to promote the introduction of a job-centered wage system through sectoral and cross-company collective bargaining to prevent privileges for regular workers in large corporations and the public sector. Co-representative Jo said, "This wage system will not only apply to the primary labor market but will also aim for sectoral and regional wage systems applicable to the secondary labor market of non-regular workers in small and medium-sized enterprises, reducing wage disparities between companies and employment types and realizing the principle of equal pay for equal work," adding, "We will make the reform of the retirement age an opportunity to realize equality rather than deepen polarization within labor."

He also expressed the intention to pursue labor reform, exchanging the abolition of the retirement age for the introduction of a job-based pay system, through social grand compromise. Co-representative Jo said, "We will realize the reform of the retirement age and wage system through tripartite dialogue and labor-management negotiations," and added, "We will support various collaborations at the national, industrial, and regional levels so that labor and management can develop a job-based wage system with trust." As specific support measures, he proposed establishing organizations like the U.S. specialized national wage database O-net and Germany's labor-management joint wage development organization REPA, transforming the Economic, Social and Labor Council from a presidential advisory body into a permanent advisory body of the National Assembly, and having the National Assembly's deputy speaker or senior lawmakers take charge to enhance legislative accountability.

This content was produced with the assistance of AI translation services.