Japans Aging Problems

Japan's aging problem results crutches for the economy

Due to decades of low birth rates, the Japanese population has been aging more rapidly than that of other countries that are more economically developed, according to the Organization for Economic Cooperation and Development. The population started shrinking in 2005, and the working population peaked in 1995. By 2050, each elderly Japanese will be supported by just 1.9 workers, showing a decrease from 10 in 1950.

With its declining birthrate and aging population, Japan clearly has to do something to maintain the size of its labor force (which was 62.98 million as of 2010). Mass immigration, one of its few other options, has been proposed numerous times over the years, but for cultural and societal reasons, the xenophobic government has been reluctant to propose immigration reform.

One of the drawbacks of rapid ageing in Japan is that it will be the youth who will bear the brunt of the suffering. Although unemployment rates remain among the lowest in the developed world, many of the jobs will be lower skilled ones. The children of the baby-boomer generation are currently entering their forties, which creates overcrowding at the middle-manager level of Japanese firms. Due to a seniority-based pay system, a huge strain is created on business costs, leaving less money to provide younger employees with adequate training and higher skilled jobs.

The lack of a younger management in Japanese firms has led to a decline in innovation. In the prime of their working lives, the youth wanted to conquer the world with their technological products. Now, in their sixties, they want a quieter life. The same seems to go for the country as a whole. This effectively halts the progress of the pioneering and dynamic technology industry of Japan.

What Japan Needs

By the United Nations' approximation, Japan requires an annual influx of 400,000 immigrants between 2005 and 2040 just to prevent the country's population from dwindling. These immigrants would raise Japan's gross domestic product to 50 percent higher in 2040 than it would be without the influx. According to Forbes Magazine, some 700,000 to 800,000 foreigners would be needed to increase the labor force by 1 percent annually.

Through the Forbes Magazine report, as of 2011, Japan had around 2.07 million foreigners, and immigration has slowed down since the 2011 earthquake and the Fukushima disaster. One in three overseas workers in Japan is unskilled and temporary, working in either construction or the low-skilled service sector. Other major foreign workers include those who are highly skilled, such as doctors and engineers; foreign-born workers of Japanese descent; and trainees who work in Japan for free.

According the New York Times, demographers in Japan define a health-survival inconsistency. Men appear to be much healthier than women are, but their life expectancy is lower. This shows that women are able live longer with poor health. The Japanese national census states that women are 86% of the Japanese population over 100 years. In 2007, there were approximately 32,000 centenarians in Japan; by 2030 the projection is said to be 10 times larger. The resulting consequence is that the growing number of elderly women will have a period of healthy old age, followed by a time of infirmity needing health support and government subsidized medical care leading to greater costs incurred by the government..

A total fertility rate of 2.1 would maintain stability in the population, assuming that there is no migration. However, Japan's fertility decline is startling given that the number of children wished for by women has been unusually constant, at about 2.2, for the past 30 years across all age groups. Yet, women are marrying later, postponing having children once married and even not marrying at all in larger numbers. Since virtually all babies in Japan are born with marriage, the combination of postponing and the lack of marrying