Japan’s changing demography

Japan’s ageing population is having a number of impacts – some demographic, some social and economic and even some technological!

Japan has entered a vicious cycle of low fertility and low spending that has led to a huge decline in lost GDP and a population decline of 1 million people, all since 2012. One commentator has suggested that it is death of the Japanese family. A 2016 study conducted by a Japanese research firm found that even though nearly 70% of unmarried Japanese men and 60% of unmarried Japanese women weren’t in relationships, most said they wanted to get married.

Japan faces a demographic time bombs. An aging population will mean higher costs for the government, a shortage of pension and social security-type funds, a shortage of people to care for the very aged, slow economic growth, and a shortage of young workers.

Demographic time bombs form over years, sometimes decades. In Japan’s case, the story begins in the immediate aftermath of World War II. During the early 1950s, the Japan’s Prime Minister Shigeru Yoshida made rebuilding Japan’s economy his top priority. He enlisted major corporations to offer their employees lifelong job security, asking only that workers repay them with loyalty. Japan’s economy is now the third largest in the world.

However, there was a clear downside to that economic growth. In the early 1950s, fertility rates were around 2.75 children per woman. By 1960, the fertility rate had fallen to 2.08. Japan had sunk below the critical threshold of ‘replacement fertility’ (2.1), the bare minimum to avoid losing population. Today, Japan’s fertility is 1.41, the population is falling, and extremely long work hours at work remain the norm.

For many young women, the prospect of exiting the labour force to have children can make it much harder to find work afterward.

The International Monetary Fund recently issued a warning to other Asian countries to be wary of Japan’s trajectory of ‘getting old before becoming rich.’

Compared to other countries Japan’s case is extreme, particularly as it pertains to aging. Adult diapers (incontinence pads) have outsold baby diapers (nappies) in Japan for the last six years, and many jails are becoming pseudo-nursing homes, as Japanese elders account for 20% of all crime in the country. With no one else to care for them, many reoffend just to come back. Stealing a sandwich can mean two years of jail time, but it also means two years of free housing and meals.

The elderly now make up 27% of Japan’s population, and this could rise to 40% by 2050. With that comes rising social-security costs, which the shrinking younger generations are expected to bear. In contrast, in the US, the rate is currently 15%.

Some companies have taken a number of steps to make work-life balance less of a struggle. Japanese advertising agency Dentsu recently began forcing people to take at least five days off every six months. There have been a number of work-related suicides in Japan – the phenomenon is known as ‘karoshi’ or death by overwork. The company shuts the lights off every night at 10 as an incentive for people to leave for home.

Less than 10% of managers in Japan are female. Some firms view female hires as bad investments, as pregnancy and maternity leave are viewed as a drain on company resources. According to the Japanese Prime Minister, Prime Minister Abe’s mouth, Japan is one of the most rapidly aging societies in the world and they’re going to run out of labour unless women have more babies.

To make up for an aging population and a reluctance to increase the number of immigrants, Japan’s tech sector has stepped up its efforts in robotics and artificial intelligence. In doing so, it has essentially turned a biological problem into an engineering one.  In 2014, Telecom giant SoftBank Robotics Corp. released the prototype for its Pepper robot, a friendly white humanoid with puppy-dog eyes and a chest-mounted tablet computer. In June 2015, SoftBank began selling 1,000 Pepper robots for consumer use, costing $1,600 per robot. The supply sold out in one minute.

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