SEOUL (Reuters) – Every day, 71-year-old Park Kyun delivers flowers, documents and soon-to-be parcels throughout Seoul. It’s a popular job among older people who can ride the subway for free.
Park earns 700,000 won ($550) a month for this job, known as “supplying money.” There are about 20 companies that deal with money delivery in Seoul.
“It’s fun and good for your health,” Park said. “But to be honest, I wouldn’t be doing this job if the subway wasn’t free because I wouldn’t have much money left,” he said.
This system has been in place throughout South Korea for about 40 years, and is set up as a benefit to enable the elderly to move around actively. But with a rapidly aging population and the rising costs of running the subway, the system is becoming a political issue.
Nobody has heard that the free system for the elderly should be abolished completely, but some cities that operate subways will raise ticket prices significantly or offer free rides if the central government does not pay some of the urgent costs to raise the target age. The Ministry of Finance is adamantly against the burden.
In South Korea, social welfare costs for the elderly have skyrocketed, fueling the debate about raising the retirement age from the current 60 and ensuring the sustainability of the national pension system. The subway fares debate is taking place in the middle 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 aim of fiscal reconstruction, one of the main supporters is the elderly.
Consumers are now frustrated by the highest inflation in 24 years and a sharp rise in utility bills. South Korea’s 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 parliamentary elections next year. Pwer y Popl wants to secure a parliamentary majority in this election and secure a situation that will make it easier for Mr. Yoon proceeded with reforms.
But the free travel problem will inevitably get worse over time.
More than 18% of South Korea’s 51 million population is over 65 years old. That proportion is expected to reach 30% in 2035 and 40% in 2050, according to the Statistics Office.
There are approximately 37 million people aged 65 and over in the Tokyo metropolitan area. The number of free trips exceeded 233 million last year, and the cost of Seoul Subway reached about 315 billion won ($ 250 million), which is 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, promising the rate to be up to 30%. On the other hand, the policy is to maintain the free ride system for the elderly.
In a press conference last week, Mayor Wu Shih-hun stressed that “at least some state subsidies” would be needed to keep the rate increases to a minimum. He pointed out that the free ride system for the elderly was introduced in the early 1980s under the military dictatorship of then President Chun Doo-hwan.
The finance ministry said the state is funding the construction and upgrading of the subway system, and that cities should address operating costs. “In the case of Seoul, the financial situation is actually much stronger than that of the state,” Deputy Minister Ban Ki-soon told Reuters.
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 measures similar
A Gallup poll released last week found that 60 percent of South Koreans support raising the age limit for senior incentives, including free subway rides, to 70 or older. 34% were opposed.
In response to a Reuters request for comment, 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)
