I have spent the last year researching Japan’s possible responses to the challenges of a growing aging society with a shrinking workforce. The challenges include how to keep an economy growing with fewer and fewer workers, how to boost the birthrates in declining population with large numbers of educated women having statistically fewer and fewer children, and how to take care of the burden of a growing aging society.
Japan’s is looking to the same solution for all three of these different yet related problems. A solution I have coined as the triple favour…women!
In examining the shrinking workforce, several responses are being looked at in addition to raising employment taxes and lowering or eliminating retirement benefits. Some of these responses include more outsourcing, increased use of robots, and an increase in the number of working immigrants. The first two may be implemented, but do not solve the problem of a need for a larger tax base, as robots and outsourcing cannot typically be taxed. In exploring the efforts by the government in expanding the work force through looser immigration, the outlook appears bleak. While some programs, such as nursing, have attempted to increase their foreign population, specifically from Indonesia and the Philippines, these efforts have been met with resistance from the nursing union, making it extremely difficult for foreigners to pass the tests, which must be taken in Japanese.
Although Japan is known to be a homogenous society, to simply claim that the country is xenophobic in their efforts is subjective. There are many foreigners living and working happily in Japan. Even with a large exodus after 3/11, the total number of foreigners still hovers around two million. That is about one point seven percent of the population of Japan. In comparison with France, with a nearly ten point two percent immigrant population, and the United States, with nearly thirteen percent, this is a relatively small number.
Japan’s rate of immigration remains relatively low.The United Nations has provided forecasts for member countries showing how many new immigrants would be needed to maintain their current pension and healthcare systems. In most countries the number of immigrants required would be overwhelmingly high. The estimates needed for Japan would be around 600,000 new working-age immigrants every year between now and 2050 in order to prevent a decline in the working-age population. If Japan were to follow this path, by 2050 more than a third of the population would be of non-Japanese origin. This is not what is happening, nor does it appear that it will begin to happen in the foreseeable future. As a matter of fact, the only two pieces of immigration legislation passed and implemented in the past ten years have been to tighten immigration, not loosen it.
Therefore, Japan’s solution, as often talked and written about, is to tap into the large percentage of educated women that have left the work force to raise their families, service their working husbands, and/or take care of their aging parents or in-laws. Many of these women have enjoyed a huge tax incentive to stay at home that was implemented over two decades ago. Enough of a tax break that it made more sense not to work. The end of these incentives and a slower economy may spur more women back into the work force.
The second challenge is a declining population. This challenge is being approached by giving cash incentives to parents to have more children. While some of my friends boast about receiving payment for each child, started during Hatoyama’s short stint as Prime Minister, most of their children were already born and statistics show no significant relationship between cash incentives and a substantial increase in birthrates. Any parent will gladly take money offered per child, but making an educated decision to bring an unplanned child and commit to raise them to adulthood based on approximately $300.00 a month is another story. Nonetheless, women are asked here, too, to help increase population.
The third challenge is how Japan will grow rapidly into a functioning society with already over 23 percent of its population over 65. Some responses will include increasing elderly-care facilities, but undoubtedly will include asking more women to revert back to or continue multi-generational households in order to relieve some of the burden the government will face in caring for a growing aging society.
In sum, women are being asked to return to work, have more children and take care of more aging parents and in-laws. This triple favor, in part or in whole, may be a harbinger of things to come in other societies. It will be interesting to see how Japan proceeds into an aging and declining society and more importantly what choices are made by women, individually and collectively.
This article comes from an August issue of Being a Broad.