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Home Publications Blogs Beat the Press Japan Does Not Have a Demographic Time Bomb

Japan Does Not Have a Demographic Time Bomb

Sunday, 03 August 2014 08:28

The "hard to get good help" crowd continue to dominate reporting at the Washington Post. An article on Japan's efforts to facilitate women returning to jobs after childbirth told readers:

"Japan is sitting on a demographic time bomb: With its low birth rate, the population is on track to shrink 30 percent by 2060, at the same time 40 percent of its citizens will hit old age."

There is no time bomb. Japan, like most countries, has seen an increasing ratio of retirees to workers. This has been going on for a century. This increase has been associated with rising living standards because of increases in productivity. By all projections, productivity in Japan will be vastly higher in 2060 than it is today, which means that both workers and retirees will be able to enjoy higher living standards even though there will be a lower ratio of workers to retirees.

As labor markets tighten in Japan, workers will go from less productive to more productive jobs. This will mean that people who want workers for menial jobs such as cleaning their house or tending their garden will have to pay more money. This is bad news for them, but it does not amount to a time bomb for the country.

Comments (7)Add Comment
Shrinking Population is Good
written by Robert Salzberg, August 03, 2014 9:42
As an island country, Japan is one of the countries that most needs a bit of shrinking population to prevent further strain on natural resources. This is also true of the planet as a whole.

These editiorials should also mention the infrastructure time bomb in the USA
written by John Wright, August 03, 2014 2:06
These demographic time bomb articles have an assumption that the supply of human labor must always grow and cannot be substituted for.

Perhaps the same was said for horses in the early 1800's.

However, I believe that new and improving tools and infrastructure allow humans to be more efficient, so the future demand for a stable or increasing human labor pool is an unproven assertion.

If Japan uses new technology and improved infrastructure well, I see no reason they cannot handle a shrinking population base.

One could suggest the media will always run articles bemoaning a shrinking population base as media profits depend on having a large supply of human viewers.

That may be the media's fear, intelligent machines of the future have no need to read such publications as the Washington Post.

And the Washington Post is getting advance notice of this trend with their current financials.

Per "http://www.bloombergview.com/articles/2013-08-05/washington-post-by-the-numbers"

"There's no way to characterize the decline in circulation numbers as anything other than ugly. In the past three years, average daily paid circulation for its flagship Washington Post declined 14 percent to 480,166, while Sunday circulation has dropped 11 percent to 697,026."

"Falling advertising sales were, if anything, worse. print advertising alone declined 12 percent in the past year to $228.2 million."

There seem to be few articles decrying the $1 trillion of deferred maintenance in USA infrastructure?

This is the USA's infrastructure time bomb.
When There's Not Enough People to Produce Widgets, Widgets Produced Per Person Increase
written by Last Mover, August 03, 2014 3:16

According to infinite horizon theory combined with what Dean Baker keeps saying, the "time bomb" in question represents an explosion in productivity and wages for a very small number of Japanese in a few decades.

Unless there is a robot invasion that confiscates it for others, this means everyone in Japan will end up better off in the 1% globally.

Exactly why is this a problem? ... Except of course for those already in the 1% who own the sock puppets who write this stuff.

Yes, it's a crowding out problem of course. If too many gain entry into the 1%, the concentration of income and wealth for those already there starts to dilute doesn't it, even though per capita income increases for everyone.

The world needs more Hobby Lobbies to stop the insanity of underpopulation and stunted economic growth.
It is always harder to get a good employer
written by Lord, August 03, 2014 4:01
It is always harder to get a good employer
"Time Bomb"
written by Dave, August 04, 2014 2:30
Dean concludes with the effect on people looking for workers to perform menial jobs "...people who want workers for menial jobs such as cleaning their house or tending their garden will have to pay more money. This is bad news for them, but it does not amount to a time bomb for the country."

The fact us that it will be more difficult to find people to perform menial jobs, and that includes caretakers, i.e. the people that change your diapers and wipe the drool off your chin while you're wasting away in your golden years.

Some seem to want to avoid the issue, framing the discussion as to whether or not it can be labeled a "time bomb". But in reality, it poses real problems for the people affected.
Have people care for elderly instead of waiting on the rich
written by Dean, August 04, 2014 7:03

if we increase the pay of caregivers, there would be no shortage.
Good Comment by Dean
written by Dave, August 06, 2014 6:40
Good comment by Dean. If we increase the pay of caregivers, [then] there would be no shortage. That's like if terrorists stop terrorizing, then there would be no terrorism. It's almost too easy.

And then there's reality. Home caregivers are relatively inexpensive, and even then the average joe can't afford it. Increasing their pay would make it even more difficult for the middle class to afford which actually reinforces the point I was trying to make. Someone with a PhD who makes a reasonable salary can probably afford it in her old age, but the average person probably can't especially if the cost is expected to increase.

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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.