Michael Kim
History and Theory of Planning
October 31, 2018
Elderly Poverty in South Korea
It is no secret that the South Korean economy has transformed within the past half-century and has become a global superpower with the 11th largest economy in the world and a lead exporter in entertainment, smartphones, and cars. Often referred to as the Miracle on the Han River, S. Korea had rapidly shifted from an agricultural into an industrialized nation embracing capitalism and innovation to expand their presence in the global market. Yet in this success story, the people who had built the current economy are hidden. S. Korea’s fixation on economic growth and relations between North Korea has pushed social programs for the elderly poor to be ignored.
The elderly poverty rate in S. Korea is 48.6% meaning nearly one of every two people over the age of 65 is in relative poverty — the highest amongst OECD countries. As the economic structure shifted, Korean culture and ideology followed suit. Korean society, traditionally rooted in Confucian principles such as filial piety, has adopted Western principles of neoliberalism. Previously it was assumed that children would take care of their parents when they grew older, but attitudes toward this have changed. In 2002, 9.6% of Koreans believed that an individual is responsible for financing their own post-retirement, a figure which increased to 16.6% in 2014. Moreover, in the same time period, the number of people who think family members should take care of their aging parents dropped from 70.7% to 31.7%. S. Korea must understand that elderly welfare is no longer a familial responsibility, but one that the government should provide. As quickly as S. Korea adopted the capitalistic and neoliberal model, they were not prepared for its consequence — unequal distribution of collective wealth with winners and losers. And it is evident that S. Korea is struggling to produce a social aid model to provide for their elders and that they are the losers. The issue of providing welfare to people 65+ is progressively salient as Korea’s population is only getting older. With one of the lowest birth rates among OECD countries at 1.05 and the fact that by 2030 that 1 in every 3 Koreans will be elderly, solving this issue should one of Korea’s priority. While S. Korea does have social programs for the poor, such as universal healthcare, free or discounted public transportation, and old age living pensions, the aid they receive is not sufficient.
Seniors in S. Korea today are the first generation that have experienced the full effects of Korea’s transformation and are the first to deal with this cultural shift. Thus, this a new issue for the Korean government. The current welfare system in place are: the Basic Livelihood Security Programme (BLSP) and Basic Old-Age Pension (BOAP) introduced in 2000 and 2008, respectively, are for those in serious need. The former was designed for those in absolute poverty and in determining eligibility includes both income and asset. However as housing is one of the biggest assets held by the elderly, many do not qualify for this program even if their income is extremely low. The Korean government takes advantage of this caveat and rather than allowing elderly to age in place and live in their own communities, they offer reverse mortgages. Especially since S. Korea is 90% mountainous, places to live are scarce — the government exploits the land-owning seniors. In exchange for their land or house, installment payments and government housing are provided. Their homes are often given to younger people, highlighting the prevalence of ageism in Korean welfare policies. Another major disqualifier for the BLSP is the family support obligation rule — those who can receive assistance from their family members are not eligible to get aid. Here, S. Korea disregards the underlying cultural shift and operates on the old system. This lack of foresight has exacerbated poverty for elders. Therefore, only 6.3% of Korean elders qualify for BLSP. On the other hand, the BOAP, specifically designed for assisting older citizens fails to provide sufficient means of living . As 67% of elders are covered, it reaches a wide range of elders but only provides 3% of average earnings. Korea only spends 1.7% of its GDP on care for the elderly. The distribution of coverage approaches efficiency, however the amount provided is dismal. There is no cohesive or sufficient public welfare or retirement program for elders, who need to fend for themselves to in order make ends meet.
Meeting these ends for Korean seniors usually means working within an informal economy. Although many Korean elders want jobs with 62.4% aged 55 to 79 wanting a job, only 30.7% are employed. This gap in demand and supply have led Korean elders to find alternative solutions, such as cardboard collection, prostitution, and crime. Most elders who engage in the informal economy receive inadequate form of welfare from the Korean government, and also to escape isolation and to feel useful. This idea of utility is strongly ingrained in Korean culture as group identity reigns over the individual — doing odd jobs provide a sense of dignity. Korean seniors often do not reach out for help because their own children are struggling within the new economy, and asking for help is shameful. Seniors have also adopted the idea of individual responsibility and blame themselves for failing to fund their own retirement. Still, Korean elders want jobs and contribute to the economy but they are unable get them. The work for the elderly is usually unskilled, manual labor with low wages. Job assistance programs and openings for the elderly is limited as the Korean government solely focuses on their youth, perceiving the elderly as unable to hold steady jobs. If Korea does not protect their elderly population, informal economies will grow as more elderly rely on it for jobs and the size of their active workforce drops.
The financial strain of elders is not the only issue facing them. Built on generations of traditional models of family, elder parents struggle to both support themselves financially and experience living alone. Although seniors living alone or in poverty is not a strange phenomena, the effects are devastating. The suicide rate for Korean elders is 12 people per day, four times the OECD average. Economic difficulty and isolation were listed as the top reasons for suicide. Korean elders are typically too ashamed to ask for the mental health assistance they need, fostering the need for a dual pronged support system of social and financial welfare. But currently most funding of aid for seniors is financial, while social programs receive significantly less. This isolation that seniors in Korea experience is yet another symptom of the breakdown in social structure caused by the restructured economy.
Looking forward, this weak welfare framework for the elderly, especially considering the aging future population needs to be restructured. The Korean government holds its senior citizens in limbo not allowing them to die, but to forcing them live in poor conditions. They need to adapt to this new cultural paradigm and in doing so understand how to create a sufficient and socially engaging welfare state for the elderly.