Japan's population shrinks as elderly make up 25%

The proportion of people aged 65 or over is forecast to reach nearly 40% of the population in 2060, the government has warned

That's a frightening statistic for any country, there's absolutely no way a country can support that many pensioners.

In truth, the taxes coming in aren’t quite covering retirement benefits now. Put another way, the longer the Japanese politicians wait to address the shortfall, the sharper the cuts will be for younger folks and probably the better off too. The burden will still fall most heavily on the young and better off, but those nearing or in retirement now would likely carry at least some of the load.

Open up mass immigration!

The birth rate has risen from a low of 1.26 in 2005 to 1.42 in 2013, but still needs to go up significantly.

In America, those who live there and respect American way of life are regarded as Americans. In Japan in the most traditional world of sumo, all three yokozunas are mongolean. The sumo association answered to a question about the problem, they are accustomed to the Japanese way of life and they respect Japanese tratitions. There is no problem about it. The most traditional world of sumo in Japan has already become international. Why not the Japanese government and society learn from them?

One of the major reasons for the decrease in birth rate is that more Japanese women delay marriage or choose to stay single to pursue higher education and greater economic independence. Too much of the burden is placed upon women to halt the current trend, which bodes ill for Japan's future economic health.

CrazyJoeApr. 16, 2014 - 08:14AM JST One of the major reasons for the decrease in birth rate is that more Japanese women delay marriage or choose to stay single to pursue higher education and greater economic independence.

It might be, but the average Japanese workers have not received a "raise" in 15 years. It has alot to do with economics. If men cannot support a family, he will also delay or never get married. Majority of new jobs created in Japan is partime. How can you support a family?

Fresh data have painted a worrisome picture of Japan for the next decade and beyond. Here we have an accelerated graying population, a scant birthrate combined with steady growth of unmarried young people in single-person households. (Not to mention a massive debt burden is going to be shared by a shirking overall population.)

Japan’s policymakers will face daunting challenges in order to reverse the tide. Apparently, there is no magic bullet to fix those problems in a quick and pain-free way. Raising retirement age and increasing immigration should help in some degrees if these reforms can pass the legislative hurdles and public resistance.

And yet the most habitable places (cultural, economic, transport, schools) are still over-populated by anywhere from 25-40% with relatively low population density.

Once the bulge is through the python in 20 years time the population will stabilize with the aged comprising a lower percentage of the total. If the nation can weather the stagnation of the last 20 year or so, it can weather the the increased social-welfare burden.

While Japan could do with an increased level of immigration just for diversity's sake, that wouldn't fix the economy, particularly with women already under-represented in the workforce. Japan isn't that short on workers. The problems are structural, just as they are will all mature capitalist economies - most manufacturing jobs have moved elsewhere never to return.

Japan’s economic problems result from its social problems, their solution will require changes in Japanese attitudes toward women’s roles, immigration and sustainable resource use. What makes the problem so serious in Japan is the refusal to do what other countries have done by admitting immigration of younger educated people from overseas. It is very difficult to immigrate to Japan, and even harder to obtain citizenship. This rejection of immigration not only bodes ill for the future of Japan’s retirement system, but also deprives the country of the pool of workers, artists, scientists and inventors that immigrants represent for the U.S., Western Europe and Australia. While immigration creates big problems, lack of it creates bigger ones.

"the taxes coming in aren’t quite covering retirement benefits now."

The don't have to. When the gov't pays a pensioner, it doesn't withdraw money from a fund and makes a bank transfer. It simply electronically credits the pensioner's account with yen that the gov't has the authority to issue. Bingo, money is created.

For the umpteenth time, Japan's spending is not constrained by tax revenue.

Easing the immigration policy is the only way forward. I think we'd all agree that Japan is still very much a "closed" country. 25% is alarming - but it's evident no matter where you go. Elderly people everywhere. Japan needs to decentralise from cities like Tokyo and Osaka and build newer communities outside these areas (Tokyo is continuing to grow and is now basically bursting at the seams).

I'm a realist and know none of this will happen, though.

The powers that be in Japan would sooner watch the country fall into the dust than open up the borders to more immigration. It's their mindset, and nothing will change it.

The only way forward is lowering taxes and regulations. And in some cases abolishing certain existing taxes in place. The corporate tax rate for example hovers around 38% making it the highest or second highest in the world. All these taxes take away income from families and contributes to inflated prices of common necessities in Japan. Japanese citizens have made it clear many times the desire to have more children but cannot afford to do so.

Immigration certainly does not solve this problem not one bit. As hardly any will be able ti fully integrate into Japanese culture and thus end up living off the state making it worse for everyone else.

About the birthrate rising a bit, it's "too little too late" to prevent massive problems going forward. The only solution is to open up Japan for much more immigration, but of course most of you are frowning about that because you are avoiding reality. So unless something changes, Japan is on straight on course for massive suffering in the fullness of time.

It's also the fault of the country's culture of overwork. When someone is on the job 50-60 hours a week, not much time or energy left to make babies.

being in Tokyo for 10 years I understand why population is decreasing in such a healthy envoironmrnt.. reasons are:

Gaming Console Smart Phones Easy availability of all sort of Sex Toys Manga Comics Robot Restaurent and Kabukicho like area

Shutdown or clampdown on above things for a while and see result.

Raise the retirement age. Increase immigration of young people. Lower wasteful government spending on pointless causes. Make it easier for people to have families/get married. Get people to see that families can provide just as much happiness/satisfaction as designer handbags/pachinko/smartphones/working.

I'm not buying into the theory that more young people are needed to support the increasing number of older people. There have been huge increases in productivity due to the introduction of computers and robots reducing the need for more workers. That will continue to increase.

In the past you might have fifty or a hundred workers in a company entering invoice figures into books which another large group would add up and enter into account ledgers. The ledgers would be added up and entered into balance books and the results analyzed by accountants. Today it's all done with bar codes and computers and those hundreds of workers have all been replaced but a handful of workers.

This is true at every level and in every department of every company. Two or three are doing work that once required hundreds.

All the profit from the reduction in the number of workers is going to the companies in increased profits. Tax that profit and, bingo, you've got the money needed to support the aging workers.

MoondogApr. 16, 2014 - 10:36AM JST

I'm not buying into the theory that more young people are needed to support the increasing number of older people.

I agree. Japan still has a high unemployment rate of young workers.

When the gov't pays a pensioner ... simply electronically credits the pensioner's account with yen that the gov't has the authority to issue ... Japan's spending is not constrained by tax revenue.

That's fantastic. Japan alone could bail out any bankrupt entity in the entire world using such proposed practices.

What could possibly go wrong?

So, they estimate that nearly half the population will be 65 or older within 50 years, but have no plans to open immigration to compensate for it? Just who is gonna pay for half of the population being on the failed pension system? Who is gonna pay for the increased medical costs? Who is gonna fill all the job vacancies? Who is prepared to pay 50% tax on their salary because of the ignorance of the present government? When this comes to pass Japan will make Spain look like a rich country cos Japan will be a financial desert! They already have the world's largest public debt (by double the US) and Abenomics has increased it even further. This country is gonna implode!

sfjp330 APR. 16, 2014 - 08:43AM JST

This rejection of immigration not only bodes ill for the future of Japan’s retirement system,

US is the most generous nation for immigration. However immigrants caused more burden for US social welfare system. Most of them are opportunists instead of contributors. If immigrants will bring their family with little income, it will put more pressure on infrastructure, health care and environment. During the boom years of 1990s, almost all of the skilled immigrants enjoyed the relatively stable and well paid employment in US. After 2008, there are not many job opportunities for skilled immigrants even highly skilled Americans. Importing skilled people needed investing billions for boosting the economic growth and infrastructure.

country of the pool of workers, artists, scientists and inventors that immigrants represent for the U.S., Western Europe and Australia

Some skilled immigrants contributed the economies of west. However not all of them are successful in the west. Instead of importing skilled immigrants, business immigrants who are cashed up is more desirable for Japanese economy and social welfare. If someone can contribute 10 million dollars for Japanese retirement fund, he or she will be offered as permanent resident. It is win win for both Japan and immigrants.

It's interesting to read the comments about skilled labor immigration. Japan will be so broke and the taxes will be so high that no skilled people would even bother coming to Japan. They'll be lucky if they can entice people from third world countries to come and pay for Japan's elderly.

Cultural thinking and a lack of immigration has made Japan more susceptible to ageing. The "parasite single" concept we have heard about is significant too. Many young folks have become parasites, being spoilt by their parents and not getting married. Their unwillingness to work has increased the burden on working folks to pay for rising pension and welfare costs.

Next year the top tax rate goes to 45% for national, which means 55% with local and prefecture added in. I love Japan dearly and want to be buried here, but as the tax rates rise and they want to take 60, 70% of my money, they'll end up with nothing as I won't be here.

Allowing Japan Inc to hire temp staff should be looked at.

Mostly I think a massive depopulation of the cities is one way. Keep the downtown area but move businesses/families/etc. out. The farms will be less needed if the secret TPP goes through. Then rebuild the suburbs with family homes in mind. "No more mansions!" Should be the mantra. It will take 40+ years but the quality of life will pay off in the end.

That's fantastic. Japan alone could bail out any bankrupt entity in the entire world using such proposed practices.

What could possibly go wrong?

@fxgai, I love the sarcasm! Lets just print money and feel happy! Let the common Tanaka print money too, all will be paid for and we call can blow it on pachinko and LV bags.

Yeah, I'm also not entirely convinced of the "magic bullet" of immigration. Certainly, unskilled/skilled labor (comprising of single people) coming into Japan would help, but its not going to solve all the issues; eventually, we'll be left with the same situation, but instead immigrant families will be feeling the effects of Japan's rigorous system.

There needs to be structural reforms in Japanese society to reverse the trend. Tax reforms, getting more women in the work-place (while letting them have a career and children at the same time), raising the retirement age, education reforms, etc.

Also, wouldn't hurt to crack down on the relationship "substitutes" that are rampant in Japan.

Just stating that the solution is "immigration" isn't helpful. For example, the government propose to bring in construction worker "trainees" from overseas, but such people will hardly pay any taxes as their salaries will be too low. There are plenty of idle people in the country who could be brought into employment first, such as many women, but the government's daft tax system and workplace discrimination discourages many women from working full time.

There is a skilled worker scheme for high-income migrants but it has failed to attract many people. Besides, isn't it a bit of a cheek for the government to basically say "come to Japan and help pay our pensions, but make sure you leave before you can claim yours"?

Raising the retirement age to 70 will also help to solve the problem. With the Japanese loving to spend every waking moment in the office it should be quite a popular move.

Here's a solution, decrease the tax bracket for younger folks who are within a sustainable taxable income. At the same time, provide MORE subsidies (lower interest rates or down payment requirement for 1st time buyers that are couples with child/children) and incentives for young couples to have a 2 children. 1 child per couple won't turn the tide. Companies and corporate will have to get in along with this. Or programs that support single parents.

Its probably unfair to the single without child. But it has to be a national policy to help Japan as a nation in order to it to be able to not just compete but to survive.

An aging population without proper replenishment is one of the most arduous obstacle that Japan is facing as I have mentioned this a gazillion times here. Immigration policy will help but I doubt Japan will open too much since they are too xenophobic. The only other way is social-economic policy.

China has one child policy.

Japan should try something similar in taught, but a complete opposite of China's. Like benefits for women who would marry and have children. Benefits for being in a family. Something that would entice people to consider starting a family instead of pushing for a career for their entire life. Benefits for having more than one child... and so on.

This situation can still be reversed, but only if the government is willing.

Also the way people try to spend as much time as possible at work, I just think its wrong in all aspects. One should do everything in one's power to finish work on time and go home to spend time with one's family. It's horrible when a child treats a parent like a guest due to spending so little time home. Whatever you do for your family means little if you are not present in the family.

The thing is that the elderly also hold the balance of power at election time and policy making, therefore they look after their needs first and future generations second or third. The is a big need for young people to enter into the policy debate either formally through political involvement or through voting. Because by the time the balance changes Japan will be too far behind the eight ball to make any reasonable change viable.

While birth rates are up opportunity is down. The Government needs to look to the future with such things like farming for example. Farming is generally made up of middle age and elderly people and given many of the elderly are come or coming to their retirement age who is going to keep the farms going.

The Government should consider encouraging young people taking up farming and making it successful and profitable. This is one way more younger people could be employed by having their own farm business which in turn helps the economy. It's not the only suggestion but one of many to consider.

Antthom is right about the young required to participate in politics but the people in their prime should understand this as an issue as well since it's going to be their pention that would on the line. Another point would be to lower education fee in general since this is one of the biggest issues that young couples talks about when considering a child saying we can afford one but not two.

One last point is to decenteralize HQ and move away from Tokyo and Osaka since an hour and a half to commute door to door leaves little time to spend quality time at home.

@gaijindesi

"3. Easy availability of all sort of Sex Toys"

I'm sorry, but this is one of the funniest comments I've seen. So you think if sex toys were banned, young people everywhere would suddenly think "Oh no. No sex toys. Darn it. i'll just have to go and have sex with a human and make babies"?

Those who think immigration is a "solution" failed mathematics. If old people need young immigrants, then the immigrants soon get old and will need even more immigrants and so forth. It is like a ponzi scheme and solves nothing.

The solution is to create "lifetime learning" program for girls so that they can quit high school for marriage and family life while taking classes (online, evening, correspondence, etc) very slowly to get their college degree by the time they are in their 40's and their kids have grown. This way young girls will postpone education and career until midlife after they have first enjoyed raising a family for the good of the society.

Why can't Japan just accept a bunch of mixed race people in their country? They could be the Brazil of Asia!

@Jusen

If you look careful at it, you will notice that several countries are no so hot in the "other country/races" thing.

Any how.. one thing from where to star is making more people like me..... Nissei or "half (double they call it these days)"

With this going on, they can't really afford to be homogenic nation. Too bad they didn't worry too much about it before.

Moar J-girls need to be knocked up!!!

They NEED more babies. Start paying families a wage to have them. Seriously. None of this 50% maternity leave nonsense. Give them a million yen every time they have a child.

@Marcelito

Young people are energetic, smart and heavy liters of the economy. However capital is the creator of job opportunities. Without someone risks his or her money for business, there will be no jobs for that reproductive young people. Japan is struggling to create the jobs for army of young graduates for every year. Young will not be young forever. They will be old too.

US has many young immigrants from south America. However they can barely lift the GDP of US unlike Google, Apple, Sun Micro system and Intel Inc. These co-operations are backbone of US economy. When the young people reproduce the unwanted off spring, US have to foot the bill for medical expense, child care and education.

Japan is not USA which is rich in natural resources and having the vast land. Japan has no Obamacare. Japan has Abenomics which is increasing the cost of living. Immigration is not magic wand for Japan ailing economy and demographic time bomb.

@Daniel Neagari,

I wouldn`t be worried about other countries. Secondly, the countries you may be referring to are underdeveloped, impoverished, unstable and war ravaged. Hard to put those places on the same page as Japan. Oz, Eur, N. Amer, Braz are in a different category.

Maybe a growing number of people just don`t want kids. Things change.

More J-girls just need to be k- up.

"That's fantastic. Japan alone could bail out any bankrupt entity in the entire world using such proposed practices."

If the "entity's" obligations are denominated in yen, then yes it could.

"What could possibly wrong?"

You tell me. What exactly has "gone wrong" from Japan's very loose monetary policy? (Speculation doesn't count.)

If the "entity's" obligations are denominated in yen, then yes it could.

Yen can be converted to any other currency, so why the need for that qualification?

What exactly has "gone wrong" from Japan's very loose monetary policy?

It has aided the government in accumulating a huge mountain of debt, which is at this point realistically out of control (unless the government turns down the "austerity" route).

So why might that become a problem I hear you ask. As noted in our frequent discussions this debt is largely held by domestic entities.

In Japan's post-war episode, as I learned from reading an article yesterday, they dealt with their domestic debt mountain at that time by freezing people's assets, and then confiscating as much as they needed to bring the debt under control. Laws change and they mightn't be able to do that again now, and having the BOJ monetize the debt directly would also be illegal, but they still have the option of just defaulting. It's all just the semantics, choosing your route to hell ("austerity" is just another of the options).

You being the brave dare-devil seem intent that today's government throws caution to the wind, but the thing is, what do the politicians who are in charge think? What might be the trigger that makes them think - "yabai! We have to do something!"?

Sure - you have it on your side that nothing has blown up yet, but Japan itself has an actual record of blowing up in the past. And just as it was then, today's huge debt mountain is yen-denominated.

One question is how many of these pensioners over 65 pass the safe withdrawal rate i.e. the maximum rate at which you can spend your retirement savings, such that you don’t run out in your lifetime.

I kept on hearing the rather unhinged reference to male herbivores (Soushoku-kei Danshi), Does this so called grass grazing group have a few pages stuck together, are there behavior seriously playing a part in Japans declining birth rate?.

"but Japan itself has an actual record of blowing up in the past."

The last time in 1991 was caused by the financial and real-estate industries. Gov't debt had nothing to do with it.

"Yen can be converted to any other currency,"

Yes, and what happens to all that yen after the conversion? (Hint: it doesn't disappear)

In the past, Japan had capital restrictions, a pegged currency, foreign obligations and the gold standard. Now, it has none of those things.

FIRST THING: get rid of any mandatory retirement limits. I want to do my job, which I like a lot and am good at, for as long as possible. All the time I am working, I am not a burden to society. Why is this so hard to implement?

I agree with the posters who call for more immigration, but cannot see any realistic prospect of it happening on a scale large enough to make a difference.

There is resistance to idea among older voters who are 25% of the population, but more like 30% of the electorate (because those under 20 cannot vote) and probably 40% of the electorate that actually does vote (because people in their 20s and 30s, although eligible, vote less often in practice). That ratio gives the elderly enormous political clout to resist both immigration and any cuts to their benefits.

Moreover, you might even argue those who vote from an "elderly perspective" (say those 10 years off retirement or aged between 55-65) pushes the effective voting share of the elderly block to 50% of the voting electorate, which makes it almost politically impossible to undertake reform.

Nobody in the Abe administration had said anything about boosting immigration as far as I know.

Patricia YarrowApr. 16, 2014 - 06:33PM JST FIRST THING: get rid of any mandatory retirement limits. I want to do my job, which I like a lot and am good at, for as long as possible. All the time I am working, I am not a burden to society. Why is this so hard to implement?

Exactly. What is the problem here? The problem is that elderly people are forced into retirement. Today's 60 is like 50 in the 1980's. Sure, scale back their working hours a bit (but seniority tends to deal with that problem), but otherwise 60 year olds who want to work should be allowed to work as long as they like.

In many poorer countries retirees retire on Friday and they're back in the office on Monday as an "independent contractor" earning 10% more and doing training and mentoring in addition to a lot of their old duties. You don't need to be young to sit behind a desk, and the vast majority of Japan's jobs are white collar.

The elephant in the room in Japan is the complete lack of training and development, meaning that by 60 most Japanese employees' skills are completely useless and have never been updated, which is why Japanese corporate lobbyists are blocking any attempt to raise the retirement age. Their complete lack of HR planning has created this mess, and again the taxpayer is left footing the bill for companies' money-saving shortcuts.

I agree that most Japanese over 65 want to "have their cake and eat it too". This is a major reason why this country is in such a mess. The age to collect a pension should have been changed over a decade go...perhaps to 67 (but in increments)(disabled people able to collect sooner of course) Many (not all but many) of the people over 60 are of able body or at least able mind and should work longer instead of complaining again and again.

I know this will get me a lot of grief, but, respectfully, a xenophobic country that refused to change, either structually or culturally, and instead tried to simply ignore the problems and spend its way back to prosperity is just seeing the outcome of that. Just as Japan rising was a blueprint for much of the rest of Asia, so should Japan falling.

bruinfanApr. 16, 2014 - 08:33PM JST I agree that most Japanese over 65 want to "have their cake and eat it too". This is a major reason why this country is in such a mess. The age to collect a pension should have been changed over a decade go...perhaps to 67 (but in increments)(disabled people able to collect sooner of course) Many (not all but many) of the people over 60 are of able body or at least able mind and should work longer instead of complaining again and again.

... I think you may have the wrong end of the stick here bruinfan. Older people WANT to work, but are not ALLOWED to work because of the legal retirement age. Their companies simply won't keep them on. Not the other way around like you seem to think.

The new batch of data heightens the urgency for Japanese policy reforms.

But, reforms (any of them) are extreme hard to come by in Japan. Here we have politicians who are shortsighted for his or her own political career, general public that a silent majority is merely interested in “my backyard” from the age to receive pension to public funding allocations and interest groups which keen activities are to lobby (bribe if it’s necessary) politicians to pass or protect laws to favor their trades. On top of that, Japanese culture, by nature and neutral, defies “gaiatsu”.

Without any doubts, in 21st century, innovation and adaptation are the keys for a country to survive and shine in the background of globalization. Can Japan reshape its mindset to pursue its needed reforms to stay on top of the game? At this point, it’s hard to say. A short decade ago, Japan was the leading driving force in technology fronts, but now, look around …

Actually Frungy is not far from the truth in that a number of older people want to work. The culprits here are often the conservative older people that are "in" (i.e. call the shots and influency policy) which screw over their fellow seniors with ageism. People do need to keep on their learning and "skill set" as well.

I say give parents financial incentive to have kids earlier and more often. It's been done in other countries, like the Scandinavian ones.

I will apologize in advance for the coldness of this post but this is what I see happening.

Talk of immigration is not realistic. Anyone who has lived in Japan for more than a few years knows that Japan doesn't want immigrants and most immigrants won't want to come here with alll the rules, regulations and through-the-ceiling tax rates we can look forward to. And just like animals in captivity that refuse to breed when they feel uneasy, talk of increasing the birthrate is a waste of time as the young know that the cherished employment-for-life system is dead-and -buried and they will likely by "temp-workers" for most of their lives. These people are not giong to make families and no one can intelligently blame them. Rather, I think the government is going to realize that the elderly are simply living too long and consuming much more than they contribute (which is not necessarily their fault but true nonetheless) and begin searching for ways to cull them. Look for assisted suicide to become a big business in the future. Also watch for living wills (key question; what do want to do when you run ot of money before you body runs out of life--hence the assisted suicide option) to become mandatory in the future. And watch for the government to begin withholding medical treatment of people over a certain age, say, 85 (I mean, what do you think that state secret clause Abe is pushing is for?). The elderly can still have pain medication but surgery and other resources will be saved for the young who pay taxes and create tax payers. Again, I apologize for the coldness of this post and I hope I am wrong but I have a sinking feeling....

Nice of you guys to want make the elderly suffer. How old are you? With the leaders of government over the retirement age, you think they will abandon their own? The problem is the birthrate first and foremost, it hast to be at or above 2.33. More girls born the better but that doesn't seem with the cultural norms. The financial problems are from over spending that is independent of pensions. One thing about the debt, since almost all the debt holders are the Japanese themselves, the problem may self correct. Also, the probability is that the current young will not get as old as current elderly. The life style would suggest a declining elderly once the boomers are done. Also, medical progress is stalling. Things like antibiotics are become less effective and there are no replacements. Without effective antibiotics, life expectancy should start dropping to what it was in the early 1930's. So, don't worry about pension payout. You should be worrying about your own life expectancy.

The problem here lies in failure to adapt. We see it over and over again - Japan does not know what to do. Japan does not need a population of 120 million people in a nation that is poor on every natural resource they need to feed all those people. When Japan was a bigger producer of stuff, sure, but as more and more of production will move to countries that are cheaper to produce in, these people will become redundant. What Japan should strive for is to be a more sustainable nation. Raising retirement age is a dead end. Many seniors already work till 70 and beyond. Because they have to to make ends meet and because they want to have something to do. Instead, people should be removed from their jobs earlier. That way, the younger generation could step in, get their skills up and move the country forward instead of wasting their lives as freeters and neets.

"The problem is the birthrate first and foremost, it hast to be at or above 2.33."

I see your point but it will never happen. Thse days are gone for a long,long time if not forever.

ka_chanApr. 17, 2014 - 05:57AM JST

The problem is the birthrate first and foremost, it hast to be at or above 2.33.

http://www.ipss.go.jp/syoushika/tohkei/Popular/P_Detail2014.asp?fname=T04-06.htm&title1=%87W%81D%8Fo%90%B6%81E%89%C6%91%B0%8Cv%89%E6&title2=%95%5C%82S%81%7C%82U+%8E%E5%97v%8D%91%8F%97%90%AB%82%CC%94N%97%EE%81i%82T%8D%CE%8AK%8B%89%81j%95%CA%8Fo%90%B6%97%A6%82%A8%82%E6%82%D1%8D%87%8Cv%93%C1%8E%EA%8Fo%90%B6%97%A6%81F%8D%C5%90V%94N%8E%9F

Birth Rates (Average number of children a women is likely to give birth to for life)

Korea 1.26

Portugal 1.35

Germany 1.36

Spain 1.37

Italy 1.38

Japan 1.40

Singapore 1.45

Russia 1.59

Sweden 1.90

Australia 1.92

UK 1.96

France 1.99

New Zealand 2.05

USA 2.08

Venezuela 2.47

Israel 3.00

Egypt 3.42

Pakistan 3.79

2.33 is far fetched.

@pointofview

How about Russia, India, China, Korea, Singapore, Germany (well there are some migration there but compared to her neighbors its pretty low). Sweden, Iceland, Norway.... are they countries in the ways of development.

The "underdeveloped" terminology is so rude and elitist...

@Daniel,

Only if you are a PC nutjob. Japans problem with immigration is that it is far too xenophobic about foreigners changing their world. And hey if you want to move to Russia, India, China etc. enjoy the ride. But as I said, other countries are irrelevant. If you want to jump off a bridge go ahead, but I dont have to.

CH3CHO

Biologically speaking it' not far fetched as you think. Basically to maintain the same population you need to replace the old set (couple) with two off-springs from each couple. Since there will be annomallies where a male and female opts out in mating or reproducing you will need a higher figure then two.

This situation is the logical result of so-called "social" programs like national pensions. They are based on nothing more than government contrived Ponzi scheme structure. At first, when introduced a far greater number of people are paying in(con-tribute-ing) than withdrawing. The simple-minded honestly believe it can go on forever. The dishonest defend it can be sustained with the magical printing press, whether physical or virtual. The reality is that the balance of payers to takers will eventually cause the scheme to collapse under its own weight. Measures to slow or delay the collapse meet with resistance and accelerate the collapse. People on the take resist decreases to their "investment". People who joined late resist having to pay far higher amounts/percentages than those already receiving. The politicians, their lying minions, and lying economists say "all is well if the system is reformed slightly ", which is neither possible nor true. But anyone who dares to identify the Ponzi scheme as a Ponzi scheme is discounted, ignored, or otherwise attacked.

And while the birthrate declines or remains low, the shrill cries of opportunists like Lagarde propose ideas that can only exasperate the situation to which they have contributed in creating.

Here's the plain fact; the social/national pension scheme is fated to certain collapse by its own design. It will not nor cannot be saved. If your eggs are all in that basket, then you are in for a disaster.

John Galt

No it is not a Ponzi scheme structure IF the population pyramid is shaped as a pyramid where the grey population is only a small cap compared to the younger generation as a large basin but unfortunately most human population is not shaped that way due to advance in medicine where the average age expectancy had skyrocketed making the grey population bigger. Another point would be that the present grey population paid their due and expect to have it returned in full.

To all that think raised immigration would help few thoughts. Who will be those immigrants? Most likely from China and other East Asia countries. Do you know how those immigrants spend their savings? 99% goes back to their home countries to support families, etc. Nothing bad in that but it wouldn't boost the much needed consumer spending within Japan.

I agree that policies should be changed and work/private life should shift to more balanced model for the majority. Companies should be encouraged to hire permanent and not only part-time workers. Everybody should go home at normal times - not 10pm or 1 am!

SamuraiBlue, it clearly IS a Ponzi-structured scheme. The style and details are obviously different, but the constantly increasing "investment " requirement in order to perpetuate the payouts are the same, and the unravelling which we're beginning to see in every developed nation due the unsustainablity of the basic structure is proof. " Since the scheme requires a continual stream of investments to fund higher returns, once investment slows down, the scheme collapses as the promoter starts having problems paying the promised returns. Such liquidity crises often trigger panics, as more people start asking for their money, similar to a bank run."

Currently, instead of a bank-run type liquidity crisis, younger people, who are fewer in number and thus more heavily burdened, are increasingly opting out by not participating in the systems.

It will surely collapse on itself, and no amount of sophistry or capital confiscation will prevent it. Denial is not just a river in Egypt, amigo.

"Another point would be that the present grey population paid their due and expect to have it returned in full." They received their contributed amounts and then some. This is not because the elderly are bad or evil; just because they are living longer. But believe me; if we cut off pensions once the retired received the amount they paid in, it would be ugly. Really, really ugly. We have to accept the fact that Social Security/年金was never intended to fund decades of life.

We have to accept the fact that Social Security/年金was never intended to fund decades of life.

Thisssssssss. People seem to keep forgetting that (in the case of the U.S., as I don't have Japanese data) when social security was implemented with an age of 60, the average life expectancy was 60. So, people were never intended toreceive this money, in the first place. Now you have people living off it for 10, 20, 30 years? Something's gotta give.

People shouldn't use social security/年金 as a retirement plan.

bfg4987

A basic mistake in understanding of Life expectency in which when they say 60 it doesn't mean the highest age would be 60, it about an average age of the population born during a certain age in which there sum in a high death rate during infancy.

Interesting commentary. As a New Zealander now living in Kyushu Japan, I'd say that intrinsically changing attitudes to mass immigration will just never happen - it seems to be culturally offensive almost as a solution with the people I have talked to. In some ways I understand an aversion to what may be perceived as a risk of diluting the importance of nearly a 1000 years of local history, and Japan hasn't had experience of managing growth from a hi-influx of immigrants. My wife works in an area of local government that deals with people in hardship, and their workload is constantly increasing - and it's not just the elderly by any means. I suspect that more hardship will surface in a public manner in the coming years, with an obvious gap between those really struggling to make ends meet and those seemingly comfortable from enhancing their pensions with savings and investments.

I work in the technology arena. Japan used to be a global powerhouse in this space, and my gut feeling is it could be again, with the will to do so. Growth in this area doesn't require the trillions of Yen investment in public works programs or overvalued US VC capital thrown at it (with subsequent tech-bubble cycles) to succeed. It does require good government policies and incubator support though, so that it's not just the already established 5-6 gigantic companies already involved in so called 'tech research' consuming any publicly funds proffered. Japan could be a world leader in high-tech aged-care, nano tech, and the Internet-of-Things. It already has a communications infrastructure second-to-none in the world. Better solutions to aged-care are what every other nation on this planet will eventually need, so why not lead the way early? Robotics is clearly an area of benefit here, so why not become the world leader in robotics for the right humanitarian reasons, unlike others doing so for military reasons?

A strategy based in the growth of intellectual capital should also start to break down traditional gender barriers as well. If learning programmes are subsidised with good processes to support family existence, and constant education is guaranteed, who wouldn't leap at this opportunity? One experienced person teaching many with online mechanisms to assist would be a very efficient way of doing this. I absolutely rely on online training myself for constant skills updating.

It's not an immediate 'fix-everything' solution, but one possible solution that seems to make some sense (well, to myself anyway).

SamuraiBlue, regarding US Social Security bfg4987 is correct that at its inception during The New Deal the life expectancy was indeed 60(which means average by definition) and was not intended to carry a large part of the population through 20-30 years of retirement benefit payouts. Life expectancy changed rapidly with advances in medical science, but the scheme didn't change with it. One major problem with such programs is the entitlement mindset it foments. Like the US system, the Japan system is also unsustainable and, in fact, already insolvent.

Actually many elderly will collect far more than they had paid in. Give it an analysis.

Comparing Japan's pension issues with Social Security is a slight red herring, in my opinion. Japan is both aging and shrinking, and the economy isn't growing anywhere nearly fast enough to keep up. Even assuming Abenomics hits its own internal targets, that still won't be enough.

Whether people want to hear it or not, Japan needs to open up to immigration.

First child birth mothers average age is over 30 year old in Japan which older than other countries and Birth rate is 1.06 percent in Tokyo in particular. I think the cost to raise a child in Japan are too expensive and benefits of mothers are less than in other countries.and japanese tax is higher since april, so it might be worse in next year. Need to think about child's education support (college free or increase support of poor children) I do not think Japanese goverment will not accept immigrants from other countries though.