December 31, 2006

THE WOG OR WORK 'TIL YOU DROP:

Daunting challenges face fast-graying nation (MARTIN WEBB, 12/31/06, Japan Times)

Robert Feldman is chief economist at Morgan Stanley Japan Securities, where, as cohead of Japan Equity Research, he is responsible for forecasting the direction of the Japanese economy.

How is Japan going to cope with its rapidly aging population?

There's only one true answer and a number of sort of supporting answers: The true answer is by raising productivity.

I think that finally there is an understanding [in the government] that the productivity agenda is the agenda for dealing with the aging population issue.

There are two main remedies that have been proposed to combat the potential damage to growth the falling population will cause: One is bringing more female members of the population into the workforce, the other is immigration.

Do you see either of those measures actually being implemented?

Well, the number of immigrants has actually been growing at about 4 percent annually for the last 20 years. That will be part of the solution, but if you calculate how many would be necessary to deal with the demographic problem, the numbers are mind-boggling -- this society is not ready for that. So that's not really going to work.

Regarding female participation rates [the percentage of adult women in the workforce], I stun 95 percent of my clients with the following question: Has the female participation rate here gone up or has it gone down over the last 15 years? Ninety-five percent say up, but the answer is down. It's down because basically the population is aging so quickly. So this is not really a gender issue, it's an age issue.

The key thing is to make sure that people over 65 keep working. That means re-education; improved labor exchanges; improved access to labor-force amenities; and better commuting, easier lifestyle decisions -- stuff like that.


Note that, in a secular society, natural population growth or stability isn't even an option to be considered.

Posted by Orrin Judd at December 31, 2006 1:59 PM
Comments

One of the two main remedies to combat the falling population: more women in the workforce. Sure, that's a plan.

Posted by: Lou Gots at December 31, 2006 4:34 PM
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