May 2, 2005


Old Japan, new labor (Suvendrini Kakuchi, 5/03/05, Asia Times)

It can be seen as an International Labor Day bonus for those trying to seek their fortunes in Japan. Since May 1, Tokyo has become less fussy with unskilled foreign workers and has started opening its labor market doors to them to ward off a looming demographic crisis.

The harsh reality confronting Japan's planners is a rapidly aging population and fast-dwindling local workforce. According to the United Nations, Japan's population will decline from 127 million in 2004 to 109 million in 2050. In effect, a smaller working population will have to support a larger group of pensioners.

"With Japan's labor force expected to decrease by 10% in the next 25 years, the economic outlook is far from bright," said Julian Chapple, a lecturer with Kyoto Sangyo University. "In all likelihood, the domestic market will shrink, production will fall, the government's revenue base will contract inexorably and it will struggle to meet welfare and medical payments for an increasing number of elderly as the dependency ratio (the number of workers supporting the elderly) will shift dramatically," Chapple wrote in a recent report for the Electronic Journal of Contemporary Japanese Studies.

Studies indicate that in 1950, one elderly person was supported by 12 members of the working population, by 1990 it was 5.5 workers, and by 2020 it is estimated to be 2.3 workers. "Naturally the government is concerned about such a scenario," wrote the lecturer. "The question now is, how can Japan ease this predicted slide, maintain its population and thereby ensure economic security and continued prosperity?"

We've been assured that the use of robots will make everything A-OK.

Posted by Orrin Judd at May 2, 2005 9:06 AM

Only in government can planners be so wrong for so long while expanding their budgets, reach and power. What a racket!

Posted by: Tom C., Stamford,Ct. at May 2, 2005 10:07 AM

Tom -

Very perspicacious. Arnold Kling has a post about the exact same problem -

Short version: Markets learn, Governments don't (or learn much more slowly).

Posted by: Bruce Cleaver at May 2, 2005 12:42 PM

Someone's got to oil the robot.

Posted by: David Cohen at May 2, 2005 8:23 PM

Toyota, Honda, Nissan, Sony...whenever you're ready to move HQ, we've got a place for you.

I recommend Dallas, Phoenix, or Denver. Take your pick.

Posted by: Brad S at May 2, 2005 9:42 PM

Someone's got to oil the robot

Never heard it called that before, but what the heck, sign me up.

Posted by: joe shropshire at May 3, 2005 1:42 AM