Now the world’s population has reached 7 billion, there is some talk of the consequences for the planet, and as always happens at this time attention has turned to Japan’s ageing population. This is usually seen as a bad thing for Japan, with various predictions of population crash and economic catastrophe for the world’s second largest (or is it third now?) economy. There is also much talk of its “unsustainable” debt problems, because as the working population shrinks the government won’t be able to pay for its debts, and suggestions also that Japan won’t be able to maintain its industrial economy and maintain an ageing population. Japan is a particularly interesting example of how much myth and nonsense can swirl around a demographic issue, because a) people commenting on it usually know nothing about Japan and just imagine it’s the same as America and b) arguments based on demographic projections are inevitably wrong. People are talking now about Japan’s population crashing in 2050; I bet in the 1970s they were talking about the yellow peril taking over the world with their high birth rate. A lot can happen in 40 years.

I think most of the myth and nonsense about Japan is driven by a combination of ignorance and rambo-style muscular deficit terrorism, which I define as that kind of macho classical economics thinking which claims a population has to stay young and vigorous in order to service public debt; public debt is always wrong and “unsustainable,” and populations that don’t thrive (i.e. produce lots of babies) will be extinguished by their vigorous rivals. This is the kind of thinking which you see in right-wing blogs all the time, about how Europe-stan is being overwhelmed demographically by “arabs” and overwhelmed economically by the more vigorous [insert current region of concern here]. It’s a heady cocktail of TANSTAAFL, anti-government-spending (unless it’s defense), society-is-in-decline-because-of-the-women theologizing. In the case of debates about Japan, it’s also infused with a fair amount of condescension, ignorance, some nice stuff about how we treat our women better than they do, and classic liberal feminist failure to consider labour rights in analyzing social problems. It should be noted it’s a common theme across all the different political traditions (right, left, libertarian, commie, feminist, palaeocon, neocon) and it misses a few important points about Japan and demographics that I want to talk about here. I don’t, incidentally, claim that the linked article is an example of any of the flaws I described; I just linked it because it’s recent, and not in a conservative rag either.

I’ll briefly explain the real reason why Japan has a birthrate problem, then describe why I think there are many ways to save it, many of which are opportunities to improve Japan and the region. I think Japan is better placed to solve the problem than other countries, and I’ll explain why. I’ll also finish with some suggestions about why an ageing population is a good thing that we should all embrace, without descending into crude environmentalist tropes about having to reduce population.

Why Japan has a Birthrate Problem

Many reasons are suggested inside and outside Japan for its falling birthrates (currently 1.2 per woman according to the linked article). Some people think it’s to do with Japan’s oft-cited feminist failings; others think it’s because Japanese aren’t having sex as much as other countries (on the basis of a survey by durex[1], who make really shit condoms), often leavened with a bit of nudge-nudge-wink-wink those Asians aren’t as fecund as us type insinuations. Some think it’s a crisis in Japanese society to do with its alleged cruelty or lack of social connections (a common view of Japanese is that they are “like robots”). Some think it’s because the government has buried its head in the sand, that women can’t have kids and a career, etc.

In fact Japan has a good maternity leave scheme (I think it’s 3 months’ leave at 60% of your salary) paid for by social insurance; although it lacks capacity in private or public childcare companies, traditionally childcare for working women has been provided by their husband’s parents (with whom they live) and this is still standard practice. In fact, I know and have known women taking advantage of both arrangements. It’s my belief that work culture is founded on the assumption that older workers are living in an extended family setting where their personal arrangements are handled by elderly family members. The problem, rather, is that workplace culture here is extremely strict and unrelenting on both genders, and particularly the situation for young workers in their 20s is such that they delay marriage and childbirth until much later. This isn’t just because women can’t have a career and children (they can). It’s because for the first 10 years of your working life in Japan you can’t have a life and a career. Japanese seishain (the “cradle-to-grave” employees that are idealized in western leftist imaginings of Japan’s 70s corporate culture) are transferred by their company on a whim, often for no reason as a matter of policy. They are expected to work hideous amounts of overtime and then to drink with their colleagues after work; they are not allowed time off beyond a few days for any reason; and they may have to apologize and give presents if they miss days at work due to illness. But particularly, the transfer culture and the overtime culture have a pernicious effect on young people’s ability to form stable relationships, and so a huge proportion of Japanese youth are putting off family life until their thirties. If you don’t start family life till your thirties, you have less children and are more likely to miss the chance altogether. The result is a falling birthrate, and the solution is to change workplace culture. This is not a problem for women workers specifically: if a company won’t allow its male workers more than a few days off for their honeymoon, what chance are female employees going to have of 3 months? The problem is a generalized problem of workplace culture and it can’t be fixed by a feminist reorientation of maternity leave rights. It needs to be fixed by a complete change in the way Japan’s businesses operate.

Why Japan is well-placed to handle the problem

Compare Japan and the UK, which also has a declining birthrate problem. Japan has low taxes, relatively low female workforce participation, a low retirement age (60 in many companies), immigration rates well below the maximum level the people will tolerate, low inflation, and a massive industrial base. The UK has extremely high taxes (e.g. its VAT rate is 20%; Japan’s is 5%), quite high female workforce participation, is already increasing its retirement age, has immigration rates that are controversial to the majority of the population, high inflation, and an economy already heavily focused on services. The only thing going in its favour is a high unemployment rate (lots of unused labour). Both countries have high government debt (120% of GDP for Japan, about 70% for the UK, I think).

So Japan can easily adapt to a slowly declining working-age population by increasing taxes, getting more women into work, increasing the retirement age, increasing immigration and shifting from industry to services in the economy. Furthermore, if the government were to set strict rules on business activity to ensure more family-friendly workplaces, and these were to result in rising prices, the inflation rate would still be manageable (it’s currently very low). What, in comparison, can Britain do? Get it’s unemployed people working again. Good luck with that, Mr. Cameron …

Another way in which I think this problem is often misunderstood by commentators is that retired Japanese people do not drop out of the workforce, but instead become important parts of the unpaid or informal economy. They often work as farmers in small-holdings long into their 70s, while also providing important childcare and family support services to their children. I know someone working in Oita whose two children are essentially cared for by her parents-in-law; she doesn’t cook any meals during the week, and her parents also run a small mandarin orchard on land they own behind the house. None of this activity is taken into account in national statistics about the “working-age population,” which under-estimate the true size of Japan’s workforce despite the near ubiquitous nature of this family support. Japanese families are not like Western families, and you can’t treat something like “declining birthrate” or “ageing population” that is intricately connected with the nature of the family and social support networks without considering this.

Why Debt is Not a Problem

So, in terms of pure resources, the ageing population is not necessarily a problem for Japan, and offers Japanese people an opportunity to reform their workplace culture for the better. Increasing women’s participation by requiring workplaces to offer maternity leave consistent with that which the government offers (i.e. forcing employers to grant unpaid maternity leave to their staff) would both increase women’s workforce participation (thus increasing the pool of workers) and increase the birthrate. Having a quiet word with the major employers and their organizations, and forcing them to abolish the stupid transfer system (or strengthen labour laws to give employees a full right of appeal) would enable people to remain in one city and build their non-work lives. This would lead to short term redundancies and perhaps cost increases, but inflation is low and unemployment is very low, so it would doubtless not be a significant long-term problem. So the problem is easily solved but might require increases in government spending to cover maternity leave, increased childcare places, etc. This is anathema to the deficit terrorists, because Japan has a high debt-to-GDP ratio, and it is seen as “unsustainable.” The alternative, of doing nothing and just allowing the workforce to shrink, is also considered unsustainable because the debt will be serviced by an increasingly small number of taxpayers.

Putting aside Japan’s ability to raise taxes to cover this problem, the whole debate is completely wrong-headed anyway. Let’s do what the deficit terrorists love to do, and compare Japan to a household. Let’s suppose it has a working-age population of about 25% of the household, which is about what it is projected to become (I think). For a normal Japanese household, we can imagine this as two ageing, retired parents, two 50-something adults, a child in University and a child in high school. The mother and the university-age child work part time and the father works full time. That’s about 25% of the population working. They have debts equal to 120% of their income. Furthermore, if we place them in the same economic position as Japan is internationally, we have to assume they’re near the top of the income scale; Dad is a university professor or company director, as was his dad. If this family approach the bank for a loan to make their house more disability-friendly, so that mother is better able to care for the disabled parents, and thus able to work an extra day a week, would any bank manager turn  them down? I don’t think so – their debt would be seen as completely sustainable. In fact if it were America this family would be encouraged to take a loan to invest in a second property or the share market (as I have been). In fact, the American or Australian dream involves a family with both adults working as hard as they can, with loans equal to about 300% of their combined income that have been taken out on a house they can only afford if its value continues to increase, and who were encouraged during the boom time to refinance and use their house as an ATM to fund their lifestyle. This was considered “sustainable” in the 2000s by most deficit-terrorists when it was done by individual households. Why is it unsustainable for Japan as a country?[2] In fact, when considered in this way, Japan is well able to finance its future problems through debt.

Some Opportunities for Japan in the “timebomb.”

Lifting the burden of social care

One of the most crushing remaining social burdens for women in Japanese society is their role as carers for ageing parents. The general assumption of Japanese life is that the eldest child will care for their parents; if a man, his wife will do it; if a woman, she’ll marry someone else’s younger son, he’ll move in with her family, and she’ll do it. But this assumption can only be maintained if most families have at least 2 children, since as soon as a lot of families start having one child, the 2-to-1 ratio of caring can’t continue. Someone has to let their child move away and do without being cared for. At at this point the system breaks, and the replacement will undoubtedly involve institutional care. The declining birthrate is driving Japanese old people into assisted living and care homes, liberating their daughters and daughters-in-law from an onerous and unpleasant family responsibility. This is a huge plus.

Achieving feminist goals

Being slaved to childbirth is a huge restriction on women’s freedom, and as the birthrate plummets women are increasingly free to live their own lives. In an ageing society with long lifespans and only 1 or 2 children per woman, women have more freedom to explore their own interests before having a child, and have more time after child-rearing to return to a fully rewarding non-family life. Reducing the number of children women have to bear has been a long-term goal of feminism, and it has been achieved in the East Asian countries. This is a good thing, and we should not be rushing to reverse it; this is also part of the reason, I think, that many people refer to the modern Japanese era as “the women’s era (onna jidai).”

Increased Immigration

Japan will benefit culturally and economically from increased immigration, but will never get this immigration without conscious effort due to the language barrier. The ageing population means that Japan has to look overseas for some types of worker, especially carers, and has started, for example, to train Philipino nurses in Japanese so that they can come and work in Japan. This gives Japan the chance to diversify its population and improve its connections with its Asian neighbours. In general Japanese relations with Asia are good but increased immigration can only make them better. The ageing population is an incentive for the government to start planning this and investing in Japanese language education throughout the Pacific. This is a huge long-term benefit for Japan’s regional relations.

Reform of Workplace Laws

The main way that Japan will increase its working-age population in the long and short term is to improve women’s participation in the workforce, and especially to improve their ability to balance work and family life. This is something that has been a long time coming in Japan and will benefit everyone, not just women who want to balance career and family. It will enable men to settle down earlier in their careers, will prevent the horrible cruelties of transfers[3], and will lead to a general reduction in overtime and overwork. This is a huge benefit for everyone.

Why Ageing Populations are Good

The opportunities identified for Japan also apply to many other countries, but I think there are some additional benefits that derive from the ageing population that are good for everyone, and which we should embrace:

  • Increased Opportunities for Developing Nations: One commons solution to labour shortages in ageing countries is to import immigrant labour from poorer countries. This is good for the people of those countries; for places like the Phillipines, foreign remittances are a sizable proportion of total private foreign investment in the country, and are good for its economy. So as we age, immigrant labour provides a form of economic aid that those countries need and that also benefits us. It’s a win!
  • Less Crime: Ageing societies will experience lower rates of crime and less serious types of crime, which is good for everyone
  • Reduced Conflict: Ageing societies have less ability to wage war, and have to reduce defense spending due to both a loss of combat-age adults, and a need to redirect spending to services. Countries that are less likely to wage aggressive war make better citizens; furthermore, when they realize they can’t maintain an aggressive army they are likely to switch their funding for forward defense from the military to aid, which again helps their poorer neighbours. This is exactly what Japan does, of course.
  • Changeing Lifespans: partially freed from the hard restraint of giving birth by 27 or 28, adults in ageing populations essentially extend their youth from 21 to 32 or 35. They also regain a second kind of youth at 50 when their child goes to university but they are still, by the standards of the ageing society, young. If you visit a Japanese love hotel on a Sunday afternoon in a major city, you’ll see that people at 50 are indeed very spry (and quite vocal!), though they may not be being spry with their life partners. The demographic shift to small families and longer functional lifespans means we get more of our lives to devote to leisure; as many as 15 years of work before childbirth, and another 10 to 20 years of full physical function after completion of the child-rearing process. This is a good thing, and we should embrace it, though it does mean redefining our understanding of youth and middle age; but that is also a good thing

As is the case with all aspects of civilization, Asia is leading the way into the future. The way the future of Japan’s ageing society develops will be very different to the expectations of the deficit terrorists and the demography alarmists of the right, and it will also, I think, be very different to the expectations of leftist and feminist critics of Japan’s response to the “problem.” Instead we will see Japanese society improved and diversified by the experience of ageing, with few serious economic consequences other than a slight increase in taxation and inflation.

 

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fn1: Given the number of love hotels in this country, the idea that Japanese are shagging less than non-Japanese is ludicrous. The last representative national survey conducted (in 2000) found 13% of all respondents in a long term relationship had sex with an average of 2.4 casual partners in the last year. Given how private Japanese people can be about sex, the possibility that they are lying through their teeth in these surveys is all too real.

fn2: I find it amazing that this stupid idea of comparing a country to a household has managed to become so useful in the deficit-terrorist toolkit, given that the last 20 years have seen a wave of unsustainable debt-financed bingeing by households that goes well beyond anything any country in the OECD has done. The fact that this idea is acceptable in polite discourse in the media is a sign of just how stupid journalists are, and how poor the contribution of classical economics – from which discipline most deficit terrorists are recruited – has been to debate about the future

fn3: In case you think I’m exaggerating the horrors of this, my university in Beppu would transfer people to its Kyoto office with one months’ notice; I once taught an intensive English course to a guy who was being sent to the Phillipines with one month’s notice, leaving his wife and two children in Japan. He spoke no English and was moving to an office with no interpreter. This is beyond mean.