The Ministry of the Interior and Safety and the City of Daegu recently announced plans to extend the retirement age of certain public employees—those in roles such as cleaning and facility management—up to 65 years. This initiative has reignited debate over retirement age reform in South Korea. Previously, calls for retirement age extensions were largely championed by labor unions in the private sector. However, with government bodies now setting a precedent, this policy shift may gain traction across other sectors of society.
These public employees, though employed by government ministries and local authorities, are not classified as civil servants. As of 2022, there were approximately 330,000 of these workers across national and local government agencies. This push to extend the retirement age is primarily driven by individuals in their 50s and 60s—often referred to as the “sandwich generation”—who face dual caregiving burdens: supporting elderly parents, many in their 80s or 90s, as well as adult children. Born mainly in the 1960s, many of these workers find themselves ill-prepared for retirement as a result of these simultaneous responsibilities.
This demographic, significantly larger than subsequent generations, represents a substantial portion of the workforce. Statistics Korea reported that as of Aug 2024, wage earners aged 50 and older numbered 8.96 million, accounting for 40% of the country’s total wage earners. This represents an increase of 3.48 million compared to a decade ago, with the imminent mass retirement of this cohort poised to see hundreds of thousands exiting the workforce annually.
Experts caution that the large-scale retirement of this “sandwich generation” could pose serious social and economic challenges. Labor shortages in skilled sectors, a downturn in consumer spending due to reduced income, and potential strains on social welfare funding are all anticipated. Additionally, this demographic’s continuing role as primary caregivers, coupled with reduced income, could create an amplified demand for government assistance.
At the Ministry of the Interior and Safety, public employees receive an average monthly salary of around 2.5 million won, with an average age nearing 50. Those in physically intensive roles such as cleaning and maintenance tend to be older, with an average age of 54. Many of these workers express a desire to remain employed until their national pension benefits become available.
The situation within the Ministry of the Interior and Safety could become more widespread as this “sandwich generation” solidifies its presence in the labor market. If forced into retirement, their absence may disrupt various economic sectors.
In July, the Bank of Korea classified those born between 1964 and 1974 as the “second baby boom generation,” totaling approximately 9.54 million individuals. As this group enters retirement, the Bank estimates that the national economic growth rate could decrease by up to 0.38 percentage points annually by 2034, due to shrinking spending and increased social care costs associated with this demographic, which comprises roughly 18.6% of the population.
Simultaneously, more companies are moving to dismantle the “age 60 retirement barrier.” Industries facing labor shortages and requiring specialized skills are spearheading this shift. For example, in March, Dongkuk Steel agreed with its labor union to extend the retirement age to 62, only two years after previously raising it to 61. Hyundai Motor Company and POSCO, on the other hand, have introduced “post-retirement rehiring,” allowing workers to re-enter on contract after retiring at 60, for up to two years.
