Japan's future

An Ant in Tokyo: Five ways Japan is responding to a shrinking population

What does it mean for a country to shed one-sixth of its population? Not through war or natural disaster, but from the impact of low birth rates and low migration, compounded over generations.

That’s the situation Japan faces now. As policy-makers are discovering, changing demographic patterns is incredibly hard to do, and nearly impossible to do quickly. So instead Japan is starting to adapt to its lower-population future. How is it doing it? And what can the rest of the world learn?

Japan’s population peaked in 2010 at 128 million, and since then it has declined 1.3 million. Now a government report found that the country is on track to shed a sixth of its population by 2045, when its population is forecast to hit just 106 million.

The population decline brings with it a shift in demographics, with the population growing greyer (so much so that Toshiba has launched a state-of-the-art audio cassette player to reach this market).

The causes for the population decline and demographic shift are well documented. The country has one of the lowest birth rates in the world, at 1.43, as people increasingly choose to stay single and couples opt for fewer children amid a high cost of living and eye-watering education expenses. And the country has one of the lowest immigration rates in the world – foreign residents make up about 2 per cent of the population – with cultural and economic factors leaving Japan reluctant to accept migrants.

The consequences are everywhere. There are 8 million unoccupied properties across Japan (forecast to rise to 21.7 million by 2033), towns and villages are shrivelling to extinction and national unemployment sits comfortably below 3 per cent.

So with the population decline entrenched, what is Japan doing to prepare itself for a smaller, older future? Here are some responses.

Working women. The successive waves of feminism that washed through the West since the 1960s have barely reached the shores of Japan. A quick glance at the national cabinet reveals just two women alongside 18 blokes. The country has a low rate of female workforce participation, with many women nudged out of the workforce when they have children and finding it difficult to return due to a scarcity of childcare. As academic Nobuko Nagase noted recently, “It is not unusual in Japan for women who graduate from excellent universities to end up in ordinary positions with mainly auxiliary duties, rather than promising career positions on the track to managerial posts.”

So it is no surprise that Prime Minister Shinzo Abe made women’s participation part of his “Abenomics” revitalisation strategy. In practice it has been slow going (the government has cut its 2020 goal for female executives to 10 per cent, from 30 per cent), but the government is seeking to improve access to childcare and preschool places for young children. If that policy starts to take hold it will bring with it the twin benefits of encouraging families to have more children as well as helping parents get back into the workforce.

While maternity leave is finally embedded as a standard entitlement, use of paternity leave is still rare. Just 3 per cent of men take paternity leave after their partners give birth (though sometimes as few as just five days) and the government has set the target at 13 per cent by 2020. The government is also seeking to scrap a spousal tax break that critics say has long dissuaded wives from seeking full-time work

Japan workplaces are notoriously family-unfriendly, with an expectation of long hours coupled with a culture of dining and drinking that leave the country’s famed salarymen stumbling home late into the night. It is perhaps unsurprising that generations of Japanese children have grown up referring to their corporate ladder-climbing fathers as their “Sunday friend”, such was the frequency with which they saw him. But slowly that culture is changing, with the leading employer group agreeing to limit overtime to 100 hours a month and workplace socialising moving beyond the misogyny of hostess bars.

Golden oldies. With a life expectancy leading the world at 83.7 years, the cost of social security is set to balloon as baby boomers enter retirement. Social security already lays claim to one-third of the national budget, and with it comes a large politically potent constituency. The government has started nibbling around the edges, launching a review to seek to rein in growing medical fees. It is also gradually increasing the age at which people can get the pension, to 65 from 60.

It may need to go further, while also seeking to find ways to encourage older people to stay in the workforce longer. But influencing corporate Japan to take part is proving tricky. Pay in Japan is heavily linked to seniority, so companies are keen to shuffle their elder (and best remunerated staff) into retirement once they hit 60. Getting more older people working, perhaps part time, will involve breaking this nexus.

And with a shortfall of 380,000 nurses forecast for 2025, Japanese innovators are looking at ways to bridge the gap. One company, for example, has developed a thumb-sized portable electronic device that can be placed in a pocket, wallet or attached to a shoe to keep track of people with dementia. Another has come up with an ultra-thin device that can stick directly to the body, monitoring health data and sending and receiving messages.

Rise of the robots. Japan has always had a cultural openness to robots that the west has lacked, but now that openness is turning into a necessity. A hotel and café chain has started operating predominantly with robots, complete with Sawyer, a robot barista that (who?) will grind, brew and serve the café’s signature Authentic Drip Coffee for just a few hundred yen. (Oddly, the robots remain stubbornly anthropomorphic, even though many robots might be more useful taking other, less human, forms.)

Given the enthusiasm for robots it is no surprise that Japan is keen to take a leading role in driverless cars. In Yokohama, near Tokyo, self-driving taxis earlier this year were motoring along the streets as part of a trial involving carmarker Nissan and mobile app developer DeNA Co. The companies say they will launch a full service in the early 2020s. A shortage of taxi drivers is part of the motivation.

Foreign workers. While Japan remains squeamish about letting foreigners have access to citizenship, the country is becoming more open to an influx of workers to fill skill shortages. Last year the number of foreign workers grew 18 per cent, to 1.28 million, with Chinese and Vietnamese workers leading the charge.

Prime Minister Abe is mulling a plan to increase the number of foreign workers further by expanding the categories of jobs beyond the current 18, and his government just recently introduced Y320,000 (A$3900) a year in financial aid for foreign students seeking qualifications as nursing care workers. With several big events about to hit Japan – the Rugby World Cup next year and the Olympic Games in 2020 – the country will have little choice but to allow even more foreign workers.

But the barriers to migration and citizenship remain almost insurmountable. In 2016, despite a global surge in refugees, Japan’s parsimonious intake stood at just 28 people.

Rebooting government. Outside of Tokyo, populations for every part of the country are tipped to decline over the next three decades. In practice that means towns and villages disappearing and prefectures (the equivalent to states) losing the critical mass of population needed to achieve economies of scale. Some levels of government in some places are finding it tough to attract enough candidates to fill positions.

In response places are trying out different models of governance. The village of Okawa, in Kochi Prefecture, where the population had shrunk from 4000 in 1960 to just 400 today, sought to scrap its local assembly and instead have the entire population participate in decision making. Ironically, the idea was scrapped when it was apparent the largely elderly population of the town lacked the mobility to participate.

Still, proposals are on the table for moving from fully professional legislators to part-timers who would hold jobs elsewhere. A panel of experts recently proposed giving communities the option of the status quo, an “intensive and professional” assembly comprising a small number of full-time members and a “mass participation” assembly comprising a large number of part-time members.

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A declining population is not inherently problematic; indeed places facing a scarcity of resources would probably benefit from it. But if the population falls without mechanisms in place to adjust it can be painful. Time will tell whether Japan’s efforts are enough to maintain the standard of living its people expect.

But it would be naïve to think this is just Japan’s problem. Parts of Europe, including Russia, have falling populations, as do parts of rural Australia. There will surely be lessons we can learn from Japan.

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