Japan’s economy may be booming, but its population is declining. In fact, last year, the country reportedly became the first nation in modern history to experience demographic contraction.
What’s more, that trend may be followed soon by Italy, Germany, Spain and most of Eastern Europe, says one observer, with China close behind.
According to sources, Japan’s population peaked in 2005 at 128 million, and it’s expected to fall below 100 million by the middle of the century when an estimated 36 percent will be 65 or older. The trend rate of growth has reportedly dropped to 1.5 percent.
One expert opined that the effects of decline are already affecting every aspect of the economy. Wages, for example, have dropped for the last five consecutive months. That, in turn, is complicating efforts to stave off deflation. Salaries reportedly have fallen 8 percent over the past decade as many baby boomers retiring at the high end of the pay scale have been replaced by younger workers, many working on part-time contracts at half the salary.
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The expert predicts the situation will be much worse in China where, he offered, the workforce will peak in eight years "before plunging into the fastest downward spiral ever seen in peacetime.”
China’s situation, he adds, is exacerbated by its one-child policy of the 1980s and 1990s and the country’s relatively short track record of strong economic growth compared to other Asian countries like Japan.
Another China expert said China’s long-term prospects were "horrible”.
He estimated that China’s economic development is 40 years behind Japan on most indicators, and its return on investment is a "dismal” 4.4, far below that of Japan (3.2), South Korea (3.2) and Taiwan (2.7) during their growth spurts.
That’s small consolation for Japan where the country’s demographic decline is already turning up in political discussions.
Most notably, Japan’s cabinet office has reportedly pushed through affirmative action quotas designed to raise the number of women in public sector management jobs from 10 percent to 30 percent by 2020. This is a country which has been slow to embrace feminism and which has clung to a more traditional role of women.
Japanese women, however, have rebelled in their own way. A spokesperson, for example, said the fertility rate had crashed to 1.26 from a stable level near 2 in the 1980s.
The country, said the expert, "faces a sort of fertility paralysis.”
In another effort by the Japanese government to be more supportive of women and open more opportunities to them, it has lifted maternity pay from 25 percent to 50 percent of income, and leave has been extended from one year to 18 month. In addition, the waiting list for nurseries is also being reduced.
In still another effort, authorities have waived several immigration restrictions, consequently allowing more immigrants into the country. An estimated 300,000 Brazilians of mixed Japanese ancestry, for example, have come to Japan mostly to work in the Toyota factories of Nagoya.
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