SEOUL (Archyde.com) – Every day, 71-year-old Park Kyun-soon delivers flowers, documents and parcels all over Seoul. It’s a popular job among seniors who can ride the subway for free.
Park earns 700,000 won ($550) a month for this job, called a “silver delivery.” There are regarding 20 companies that handle silver delivery in Seoul.
“It’s fun and good for your health,” says Park. “But to be honest, I wouldn’t do this job if the subway wasn’t free because I wouldn’t have a lot of money left over,” he said.
This system has been in place throughout South Korea for regarding 40 years, and has been positioned as welfare to enable the elderly to move around actively. But with a rapidly aging population and rising costs of running the subway, the system is becoming a political issue.
No one has heard that the free system for the elderly should be completely abolished, but some cities that operate subways will raise fares significantly or offer free rides if the central government does not cover some of the costs. It is pressing to raise the target age. The Ministry of Finance is firmly opposed to the burden.
In South Korea, social welfare costs for the elderly have soared, fueling debate over raising the retirement age from the current 60 and ensuring the sustainability of the national pension system. The controversy over subway fares is taking place in the midst of this.
President Yoon Seok-yeol is also in a difficult position on this issue. While Yoon was inaugurated in May last year with the goal of financial reconstruction, one of his main supporters is the elderly.
Consumers are now frustrated by the highest inflation in 24 years and sharp hikes in utility bills. The South Korean economy suffered its first negative growth in more than two years in the October-December quarter last year.
Yoon’s ruling party, People’s Power, has warned that any reduction in the free subway system would hurt next year’s parliamentary elections. The People’s Power wants to secure a parliamentary majority in this election and secure a position that will make it easier for Mr. Yoon to push ahead with reforms.
But the free ride problem will inevitably get worse over time.
More than 18% of South Korea’s 51 million population are over the age of 65. That proportion is expected to reach 30% in 2035 and 40% in 2050, according to the Bureau of Statistics.
There are regarding 37 million people aged 65 and over in the Tokyo metropolitan area. The number of free rides surpassed 233 million last year, and Seoul Subway’s cost reached regarding 315 billion won ($250 million), equivalent to 30% of the company’s debt.
To deal with the situation, the city of Seoul last December announced plans to raise subway fares for the first time since 2015, pledging the rate to be up to 30%. On the other hand, the policy is to maintain the free ride system for the elderly.
At a press conference last week, Mayor Wu Shih-hun stressed that “at least some state subsidies” would be needed to keep the rate hikes to a minimum. He pointed out that the free ride system for the elderly was introduced in the early 1980s under then-President Chun Doo-hwan’s military dictatorship.
The finance ministry said the state was funding the construction and upgrading of the metro system, and that operating costs should be addressed by cities. Deputy Minister Ban Ki-soon told Archyde.com, “In the case of Seoul, the financial situation is actually much stronger than the state. Given that situation, it would be a bit of an overstatement to tell the state to take responsibility for this.”
Daegu, a metropolis in southeastern South Korea, recently said it would consider gradually raising the age limit for free subway rides, eventually raising it to over 70. Ota City is also considering similar measures.
A Gallup poll released last week found that 60 percent of South Koreans support raising the age limit for senior citizen incentives, including free subway rides, to age 70 or older. 34% opposed.
In response to a request for comment from Archyde.com, the president’s office said the health ministry would review whether local governments have the power to change the age limit.
(Reporter Hyonhee Shin, reporter Hyeyeon Kim)
