The Legislative Yuan in July passed the third reading of amendments to Article 54 of the Labor Standards Act (勞動基準法) that would no longer require workers to retire at the age of 65 and allow the employer and employee to negotiate an extended retirement age.
On the one hand, the move protects the rights of older workers, because in many cases, employers ask aging staff to retire with the intention of rehiring them with reduced pay and under less favorable conditions. Therefore, eliminating workplace discrimination and increasing employment opportunities would help older people who still need to work to make ends meet. On the other hand, the amendments appear to be the government preparing for a growing elderly population, as has occurred in Japan and South Korea.
Taiwan’s aging population and declining birthrate have become serious concerns. The National Development Council forecast that Taiwan would by next year become a “super-aged society,” in which 20 percent of the population is 65 years old or older. Neighboring Japan and South Korea are among Asia’s fastest-aging nations, where poverty among older people has been worsening in the past few years.
South Korea has the second-highest rate of income poverty among older people in the Organisation for Economic Co-operation and Development (OECD) nations, following Estonia, a report published in May by The Economist said.
The magazine also reported that nearly 40 percent of South Koreans older than 65 live below the OECD’s poverty line, which is half the national median income. In Japan, that rate is 20 percent, also higher than the OECD average of 14 percent.
Academics and experts say the phenomenon of elderly poverty in South Korea and Japan is becoming more serious due not only to declining birthrates and aging populations, but also changes in the labor market and rigid pension systems.
In Taiwan, as the average life expectancy increases, medical expenses and other spending grow accordingly. Pensions are not enough to cover older people’s basic living expenses, especially amid inflationary pressures. With fewer children to support their expenses due to the low birthrate, poverty among older people would grow more serious if employers continue to discriminate against middle-aged and senior workers.
Taiwan is facing growing poverty among older people, a report from the Legislative Yuan’s Budget Center said last week, urging the government to address the issue as soon as possible.
The number of people aged 65 or older with a near-poor background has grown to 64,740 over the past decade, with half of them reporting lower annual disposable income than their expenditures for last year, it said.
Among low to middle-income families, 23.38 percent had a head of household aged 65 or older last year, the highest in the past 10 years, Ministry of Health and Welfare data showed. Among low-income households, those headed by a person aged 65 or older accounted for 17.67 percent last year, also a high in the past decade.
The economic development trajectories of Taiwan and South Korea are following in the footsteps of Japan, and the same is true for their aging populations and low birthrates. Eventually, Taiwan’s super-aged society would have to face the problems of elderly poverty. The government should help extend older people’s healthy life expectancy, which is calculated by a person’s life expectancy minus the time they spend in ill health, and provide them with long-term care services. It must also reduce the number of older people living in poverty and bolster low to middle-income households’ economic security to enable older people to have a better quality of life and their children to face less financial pressure.
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