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Have you ever thought about what would happen if your country literally started to become
extinct?
That is, if its population were to decline, people were to grow older, the labor force
were to become scarce and many schools, towns and neighborhoods were to gradually become
empty.
Well, this is more or less the process that is already being experienced in Japan, the
country with the oldest population in the world. Check it out.
Today, one in four Japanese citizens is over 65 years old. They represent 28.7% of the
entire Japanese population. As a comparison, in the European Union, another territory with
many problems with demographic aging, this percentage barely exceeds 20%.
In other words, if all Japanese people over the age of 65 formed their own country, that
country would have roughly the population of Poland or Canada.
In addition, Japan is the country with the most centenarians in the world. Approximately
80,000 Japanese have crossed the 100-year barrier.
And indeed, for many experts, the process underway in Japan is just a taste of what’s
to come in much of the developed world in just a few decades.
Precisely for this reason, Japan may become a testing ground for how to deal with the
challenges posed by the reversal of the demographic pyramid.
And, take note, because this is not just an amusing anomaly. This issue could jeopardize
the entire economic and social model of our countries.
And this is where a few questions arise:
Exactly what challenges are we talking about? How can we prevent our countries and societies
from languishing in the face of an increasingly aging population? What is Japan's experience
so far?
Well, in this video we will try to answer these and other questions.
But first, let me thank, once again, all the people who generously support us on Patreon,
from the most modest contribution to the Super Patrons.
Thanks to you, this project can aspire to improve every day. Your commitment and your
help contribute to make VisualPolitik one of the leading independent political channels
on YouTube. So really, from the whole team, once again, thank you all very much.
Now, that said, let's get started!
(AN EXPLOSIVE COMBINATION?)
Those of you who have watched a few videos will know that, usually, we are not very fond
of bombarding you with data, but, on this occasion, in order to understand what is really
happening in Japan, there are some numbers that we simply must take into account.
We are talking about a country with the worst possible projections in terms of aging. To
give you an idea, by 2036 it is estimated that those over 65 years of age will already
account for almost 35% of the entire population.
At the same time, the fertility rate, which began to fall in the 1970s, is moving further
and further away from the demographic replacement rate of 2.1 children per woman.
Well, in Japan today, this figure barely exceeds 1.4 children per woman, one of the lowest
rates in the world. Although it must be noted that South Koreans take the lead in this matter.
Take a look.
And of course, the explosive cocktail of more and more elderly people and fewer and fewer
children leads irremediably to one thing: population contraction.
In fact, since 2011, the Japanese population has not stopped shrinking.
In 2020 alone, Japan's population declined by almost 400,000 people. During that year,
38 of the country's 47 prefectures lost population.
In fact, Japan's population is expected to go from around 126 million in 2020, to around
111 million by 2040 and – are you ready for this one? – to just over 87 million
by 2065.
In little more than 40 years, Japan will lose more than 30% of its inhabitants. We are talking
about an unprecedented demographic contraction.
(Japan drops out of 10 most populous countries: 2020 census – Nikkei Asia)
As you can imagine, these kinds of demographic changes have significant implications for
all areas of the country, including, of course, the economy.
(Working-age population projected to shrink in Japan and South Korea – HRM Asia
An OECD report has calculated that by 2050, Japan's working-age population would have
declined to 61.8% [Compared to the population in 2000]).
At this point I'm sure most of you are wondering... okay, but what are the causes behind all this
negative data?
How much is the responsibility of society and how much is the responsibility of public
policy?
Well, let's take a look at that.
(A COUNTRY THAT IS BECOMING EXTINCT)
There are only a few countries in the world that are already experiencing demographic
decline. South Korea and Japan are currently two of the most prominent cases.
But why? What factors are contributing to this scenario? We are going to focus on the
case of Japan, but the situation in South Korea is very similar.
The point is that we will be able to find causes and factors linked to the social and
cultural aspect on the one hand, and to the economic-political aspect on the other.
Let's start by taking a look at the first factors.
Firstly, the Japanese labor market is probably one of the most anti-family-friendly markets
in the world. The Japanese have to deal with extremely long working hours that often leave
little room to even consider starting a family.
What’s more, in the case of Japan, requesting medical leave or parental leave is frowned
upon and can have professional consequences.
Let's just say that despite the fact that Japanese law recognizes 36 weeks of paid maternity
leave and the country leads the world in paternity rights with 30 weeks, cultural barriers still
weigh heavily. For example, to give you an idea, despite
the provisions of the law, men who apply for paid paternity leave are still in the minority
and usually barely reach two weeks of leave, far less than what is legally recognized.
Another social factor affecting birth rates is the increasing tendency of the Japanese
not to form couples.
According to the latest available data, more than 35% of the population in Japan lives
alone. And what is more surprising: many Japanese do not even bother to have a partner.
[So if you want a fling, it's not clear whether going to Japan is a really great idea or a
lousy one]. Then, the numbers also tell us that, whether
for cultural or economic reasons, the Japanese are also having a lot of trouble adapting
to the changing job market.
You see, the Japanese labor market has traditionally been characterized by stable jobs. The general
worldview was that if a worker worked hard enough, he could stay in the same company
all his life, progressively improving his working conditions.
Of course, such jobs, known in the country as "regular jobs," have been in sharp decline
since the 1990s.
For example, between 1995 and 2008 alone, the number of regular workers fell by 3.8
million, while temporary and freelance positions grew by 7.6 million.
And what do the demographics tell us? Well, only 30% of temporary workers or freelancers
in their thirties are married. That's almost half as many as "regular workers" of the same
age.
So in this case, as you can see, precariousness or perceived lack of employment security could
be having an important influence. Because obviously, the more singles, the fewer children.
Now, many of you may be wondering... Okay, okay [host], but if there is a lack of children
and a lack of workers, why not encourage immigration?
And this is actually a very relevant issue. In developed countries, the arrival of immigrants
has not only made it possible to maintain or expand the labor force, but has also helped
to raise birth rates.
However, Japan is perhaps one of the most restrictive countries in the world in this
respect.
As of June 2019, only 2% of Japan's population were foreign residents. We are talking about
just over 2.8 million people.
By comparison, Spain, a country with a population three times smaller, has almost twice as many
immigrants, five and a half million, which is 11.4% of the population.
Clearly this has mostly political explanations. Until 2018, Japanese immigration law only
granted legal residence with the right to work to highly qualified professionals, professionals
in training programs from developing countries, and students under certain conditions.
In practice, visas were the property of the company, and were directly linked to the employment
contract. In other words, if the company had finished with you, you had to leave the country.
It was as simple as that.
Since 2018, and as we have already mentioned in previous videos, more flexibility has been
introduced. For example, two types of labor immigrant categories have been created. The
first allows lower-skilled foreign workers in specific sectors to stay in the country
for five years. However, they are not allowed to bring their families to the country.
The second category allows foreigners with more advanced training to bring their family
to Japan and live indefinitely, converting their visa into a permanent visa, under certain
criteria.
In short, emigrating to Japan is a trial despite the fact that they need people like a desert
needs rain.
And I'm not just saying that. The depopulation that Japan is beginning to experience is already
having noticeable consequences, and it has only just begun.
Do you want to know more about the problems that the demographic challenge is already
causing in the Land of the Rising Sun?
Well... Listen up.
(THE LOOMING CATASTROPHE)
Let me throw a question at you, did you know that in Japan there are no fewer than 896
cities and towns facing complete extinction by the year 2040?
And this is no journalistic exaggeration. They are in fact official forecasts made by
the National Institute of Population and Social Security Research, affiliated with Japan's
Ministry of Health, Labor and Welfare.
And that's not all. The percentage of vacant housing [because there are no longer people
interested in occupying them, I mean] now accounts for 13.5% of all housing in Japan,
about eight and a half million residences.
Another fact: between the years 2002 and 2017, more than 7,000 public schools in Japan were
closed due to lack of children.
Obviously all these problems are concentrated mainly in the rural areas farthest from the
main cities, where the population continues to squeeze into tiny apartments, little bigger
than a shoebox, at exorbitant prices.
Something very different to what is already happening outside the major metropolises.
The agricultural population can be a good illustration of this. In 2015, of the 1.75
million people engaged in agriculture, no less than 63.5% were over 65 years old, a
percentage that had tripled in three decades.
This makes Japan the country with the tightest ratio of dependents to people of working age
in the OECD, and by 2060 the ratio is expected to reach one elderly person for every person
of working age. You can imagine what this means in terms of social costs.
However, at least the Japanese pension system is mixed. It combines a public welfare pension
with individual private savings plans.
This means that the maximum public pension that a Japanese can receive when retiring
at the age of 65 after contributing 40 years to the National Pension Plan is only $7,500
or 6,400 euros per year, which is equivalent to just over $628 or 530 euros per month.
In Spain, for example, where demographic problems are not very different and the pension system
is pay-as-you-go, the maximum pension exceeds $43,000 or 37,000 euros per year. Almost six
times the maximum pension in Japan.
You can already imagine the scenario that is brewing in Spain, and with it the whole
Eurozone. We talked in detail about this issue in a past video that I’ll link for you in
the description.
But let's not get sidetracked.
Generally, there is some consensus that a sharp drop in population will also lead to
fewer workers and thus lower output. Although with heavy investment in capital goods such
as machinery and robotics this could be mitigated, at least that is the hope of Japanese economists.
Nevertheless, long-term economic simulations in some studies estimate that Japan's demographic
debacle will cause national GDP to fall by 20% over the next century in absolute terms,
and by around 5% in per capita terms.
Then there is the question of public spending. For example, in 2018 Japan's healthcare spending
reached 10.9% of GDP, and by 2030 it is expected to account for 12.1%. This is because healthcare
spending is closely related to the age of patients.
In Japan, per capita healthcare spending for those under 75 averaged $2,134 or €1,800
in 2018, while for those over 75, the figure soared to $9,000 or 7,600 euros, that’s
four times more.
In short, this is the demographic scenario facing Japan. A country that in just one generation
will lose almost a third of its population and will have to deal with a downward GDP
evolution and higher social expenses.
Regarding the changes they are making to adapt to this situation, we covered this in detail
in a past video here on VisualPolitik. I’ll link that one in the description as well.
The question now is, what is the solution to such a demographic collapse? Will Japan
end up becoming one of the countries most receptive to immigration due to this severe
crisis that is knocking on their door?
You can leave your opinions here below, in the comments. And remember, if you liked this
video don't forget to like and subscribe to our channel.
Once again, thank you for being there. All the best and see you next time.