All of South Korea's public corporations have agreed to adopt the wage peak system, which delays the mandatory retirement age in return for lower wages as part of labor reform measures, the finance ministry said Sunday.

The wage peak system calls for the retirement age of workers to be pushed back, giving them greater job security. The same people benefiting from this, on the other hand, must accept lower wages just before retirement. The money saved will be used to hire new employees in a kind of work-sharing arrangement.

A total of 313 public corporations have reached agreements with workers to introduce the novel wage system next year, which will create 4,411 new jobs next year, the ministry said. 

About half of Korean major conglomerates have decided to adopt the wage peak system as the Seoul government pushes to reform the country's rigid labor market.

The government has put its top policy priority on boosting employment for young people due to the higher unemployment rate for the youth.

The jobless rate of people between 15 and 29 reached 7.9 percent in September, compared with the 3.2 percent tallied for the entire country, official data showed. (Yonhap)