Shortage of caregivers to lead to $57.6 bil. loss
Korea is struggling to find caregivers, as demand for them is increasing in the midst of a demographic crisis but supply is falling far behind. As family members are forced to fulfill the tasks, the economic loss can be as much as 77 trillion won ($57.6 billion) by 2042, according to the Bank of Korea (BOK) Tuesday.
In a seminar co-hosted by the central bank and the Korea Development Institute, researchers pointed out that the mismatch in supply and demand is pushing costs of hiring housekeepers, babysitters, and elderly caretakers, among others, upward, and in turn, makes hiring more difficult.
The BOK noted in the report that there are 1.23 job vacancies per jobseeker in this market, with the possibility of hiring a caretaker within 30 days after posting a corresponding job notice falling to 50 percent this year, down from 80 percent before the pandemic.
It said the supply shortage will grow more severe, with the labor shortage in the market estimated to increase from 190,000 in 2022 to 1.55 million in 2042.
“The shortage in 2042 suggests only 30 percent of the demand will be fulfilled by then,” the central bank said.
It pointed out that the monthly nurse wage expenses for patients, mostly older adults, averaged 3.7 million won in 2023, nearly a 50 percent increase from 2016.
What is serious about the increase is that the 2023 amount was 1.7 times larger than the monthly income of median-income earners aged 65 or older.
“The finding suggests the senior citizens can’t receive help from caretakers because they do not have enough money to do so,” the BOK said.
The average monthly wage of housekeepers and babysitters was 2.64 million won in 2023, up 37 percent from 2016.
The 2024 wage is about half the monthly salary received by median-income earners in their 30s, suggesting the corresponding age group will be financially burdened by hiring caretakers.
The high cost can force more family members to fulfill the task of caretaker, restricting their participation in the labor market. The BOK estimated that the economic loss will be between 46 and 77 trillion won in 2042, up from 19 trillion won in 2022.
It also pointed out that the rising cost of housekeeping and babysitting services can lead to involuntary career breaks for young women, thereby aggravating the low birthrate problem.