To Boost Youth Employment, Raising the Retirement Age Must Be Approached Cautiously

To increase youth employment, companies must be able to hire people. Jobs do not simply appear because the government says it will create them. Hiring increases only when companies can bear the costs and predict the future. The starting point for youth jobs is not “regulation,” but “companies’ capacity to hire.”

Recently, the labor market has already been sending serious warning signs. Among regular employees, who are classified as having stable jobs, workers aged 60 and over have surpassed young people. There is nothing inherently wrong with older workers staying employed longer. The problem is that the door to stable jobs for young people is growing ever narrower.

Youth employment is a critical issue that determines the starting line for an entire generation. Young people must be able to enter the labor market on time, build skills in their first job, and establish income and career paths. If this process is delayed, an individual’s life course is bound to be shaken. Naturally, marriage, housing, and childbirth are postponed as well. In the end, youth employment is not just a problem for young individuals, but a question about the future of the Korean economy.

In this situation, pursuing a uniform extension of the retirement age is extremely risky. At first glance, raising the retirement age may seem to protect jobs for older workers. But the cost does not disappear. If companies have to bear higher labor costs, it becomes harder for them to hire new people. In the end, new hiring declines, and young people trying to enter the labor market for the first time are pushed out first.

We must also look at the structures that stand in the way of youth hiring. In many companies, wage systems based on seniority are still in place. In the current structure, where “age” and “years of service” determine wages more than “job duties” and “performance,” extending only the retirement age will inevitably increase the burden on companies. Extending the retirement age while leaving the seniority-based wage system untouched could become yet another regulation that stifles youth hiring.

What young people need now is a “place” in the labor market. Even if continued employment for older workers is necessary, it must not take the form of a structure that closes the door to new hiring. A method that simply keeps existing workers on for longer can block workforce turnover within companies and reduce opportunities for young people to gain experience. Extending the retirement age can be persuasive only when it also takes into account entry space for young people.

The continued employment system must also be designed so that it does not conflict with youth hiring. Reemployment after retirement, part-time work, a job-based wage system, and performance-based compensation are not simply measures for older workers. They are also mechanisms for adjusting corporate burdens so that room remains for new hiring. Here too, the approach should provide older workers with opportunities to work while still leaving openings for young people to enter.

If the goal is to increase youth employment, companies must not be bound hand and foot by “regulation.” We must boldly loosen labor regulations that make new hiring difficult. Structures like the step-rate wage system, which make wages and employment rigid, must of course also be changed. Young people gain opportunities only when companies can hire the workers they need, compensate them according to job duties and performance, and manage their workforce in line with changing conditions.

The solution to “youth employment” is clear. Young people must be able to get jobs. New jobs are created only when companies grow and invest, and opportunities open to young people only when the labor market is flexible. If we focus only on protecting existing employment, young people will have fewer chances to work. What young people need now is not slogans in the name of “protection,” but “jobs.”

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Original title: 청년고용 늘리려면 정년연장부터 신중해야

Author: Sung-no Choi

Date: 2026-06-28

Source: https://www.cfe.org/bbs/bbsDetail.php?cid=press&pn=1&idx=29213