Due to the era of rapid aging and the development of medical technology, the number of elderly people over the age of 60 continues to increase. In Japan, a policy was prepared to cope with such aging, and that is the Wage Peak System (WPS). Recently, it was introduced to Korea in accordance with our situation.
WPS is a system in which wages are gradually reduced by adjusting working hours from the point when workers above a certain age reach a certain age (peak). There are four types of WPS: retirement age maintenance type, retirement age extension type, re-employment type, and working hour reduction type. The appropriate type is selected under the agreement of the company and the union.
In 1998, when the need to extend the employment period of workers was raised due to rapid population aging in Japan, the retirement age of 60 was made mandatory and was introduced under the name of the ‘Senior Employee System.’ In 2013, the retirement age was extended to 65.
WPS is also closely related to labor market problems, as the issue of ‘wage flexibility for aging society’ has begun to emerge. Since WPS can partially alleviate the two major problems in the Korean labor market, the government accelerated the introduction of WPS. In Korea, after the 60-year-old retirement age extension bill was passed by the National Assembly in 2013, it came into full force in 2016. In addition, re-employment and working hour reduction types are also being implemented. According to the Ministry of Employment and Labor, 54.1% (10,400) of the 25,000 businesses with 300 or more regular employees using the retirement age system operate WPS, and 21.5% were those with less than 300 employees. In Korea, WPS is gradually gaining ground.
The Wage Peak System that Guarantees Employment of Workers
By Kim Ha-neul
I think WPS should continue to be implemented. The biggest argument of those in favor of WPS is that workers are guaranteed a retirement age of 60 while preventing sudden retirement or job loss. Although the salary will be lower, the fact that retirement can be postponed while the retirement age is guaranteed is the biggest advantage in that it brings a certain income in old age and reduces the needy life after retirement.
A company can strengthen its competitiveness. Even as a company, it can take many advantages because it avoids labor-management conflicts and can continue to utilize skilled manpower through lower costs. In addition, since the leeway created through the use of manpower can be taken to the new recruitment of young people, it can take advantage of increased efficiency and strengthened competitiveness through manpower utilization at the same time. Even though WPS is causing a serious aging problem, I agree that it should continue to be implemented because it has an advantage that the retirement age is guaranteed and extended now.
The Wage Peak System that Becomes the Enemy of Youth Employment
By Park So-yeong
I think WPS should be abolished. It is true that WPS can alleviate the aging problem by extending the retirement age, but if the retirement age is guaranteed, jobs for young people in their 20s are likely to decrease and the job market will shrink further. The introduction of WPS may lead to a situation in which layoffs become easier due to the guarantee of retirement age.
In addition, there is a problem that occurs as the retirement age is increased. People inevitably age as they get older, which reduces their desire to work. And this leads to low work efficiency.
WPS is a policy to reduce the wages of elderly workers. This can lead to a decline in overall wages in society, which can lead to the decrease in the motivation of workers and the vitality of the organization.
The purpose of WPS is not only to expand job opportunities for young people and stabilize the lives of elderly workers, but also to solve the nation's social security financial problems without burdening companies. However, the retirement age before the implementation of WPS and now is not particularly different. It is also not clear whether the working resources secured by WPS can lead to youth employment. It seems that an agreement should be found by improving the shortcomings of the system as soon as possible in order that WPS can be properly operated without the sacrifice of ordinary workers.