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Japanese Population To Shrink By One Third, Size Of Workforce To Plunge In Under 50 Years
Japan recently made waves with the news that its total debt would hit north of one quadrillion yen over the next several months: a number greater than the GDP of the entire Eurozone. Yet the one saving grace for Japan has long been the strawman that the bulk of its debt is locally held, and thus the risk of a sharp sell off is minimal as the capital has to be recycled within the borders of Japan, especially as the USA and soon the rest of the world will provide the same returns on debt as Japan, which has been locked in a 30 year deleveraging cycle, does. However, one thing that continues to be widely ignored is the demographic top that Japanese society is experiencing as ever more workers enter retirement, and there is no replenishment of young workers (perhaps Spain can export some of its youth to Tokyo?). This may change soon because as the AP reports, the Japanese population will be cut by 30% by 2060. Furthermore the country's workforce of people aged 15 to 65 will shrink to half the population (a BLS wet dream as under those conditions the US unemployment rate would be very negative). Alas, the prospect of Japan's population of 128 million dropping by 1 million every year over the coming decades, should be sufficiently sobering. This naturally means that any existing paper supply-demand equilibrium will soon have to start being reevaluated. But by 2060 we will likely have bigger problems than placing the 1 billion googol in JJBs that have to find a buyer to fund the country's deficit. Lastly, we would love to see one of those charts showing how many working people will have to fund each and every retiree by the year 2060, first in Japan, and then in every other country.
Japan’s population of 128 million will shrink by one-third and seniors will account for 40 percent of people by 2060, placing a greater burden on a smaller working-age population to support the social security and tax systems.
The grim estimate of how rapid aging will shrink Japan’s population was released Monday by the Health and Welfare Ministry.
In year 2060, Japan will have 87 million people. The number of people 65 or older will nearly double to 40 percent, while the national work force of people between ages 15 and 65 will shrink to about half of the total population, according to the estimate, made by the National Institute of Population and Social Security Research.
Nowhere will the demographic crunch courtesy of the welfare state hit the world faste than in Japan, where the natural growth rate has been negative for quite some time:
The institute says Japan has been the world’s fastest aging country, and with its birthrate among the lowest, its population decline would be among the deepest globally in coming decades.
Experts say that Japan’s population will keep losing 1 million every year in coming decades and the country urgently needs to overhaul its social security and tax system to reflect the demographic shift.
The implication is that every single aspect of financial life will need a complete overhaul as existing assumptions have to be scrapped and entirely redone.
“Pension programs, employment and labor policy and social security system in this country is not designed to reflect such rapidly progressing population decline or aging,” Noriko Tsuya, a demography expert at Keio University, said on public broadcaster NHK. “The government needs to urgently revise the system and implement new measures based on the estimate.”
Fear not though. As pointed out previously, by 2060 the word sustainable will appear at least once in ever sentence, on its way to dominating the English language entirely another 50 years later...
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Easy problem.
I could fix this issue within 2 years. I digg Asian chicks. All I need is a plane ticket and a Barry Manilow CD.
Somehow, the notion that Manilow does it for you, coupled with the Barney Fife avatar, makes me think that repopulating with your spawn is a "fix" we might be better off without. :D
You sound like my wife. :-)
She told me you'd laugh at that. :o
Also, Manilow doesn't do it for her as well as Barry White.
Japan has been living with 0 to negative growth for the last 20 years. The population knows what this means to them and the trust in government and banks is non existent at this point. We on the other hand have a long way to go to understand what has been inflicted upon us. Western countries are just now beginning to wake up to the fact that the end of the fantasy is near.
worse type of shrinkage
http://www.youtube.com/watch?v=BEnKLhi83J8&feature=related
Japan will vanish as an important global economic player well before 2060. They have no means to get (read, steal) the oil and raw materials their industrial base will need even 10 years from now.
Japan will then slowly revert to an isolated island nation sparsely populated by small-scale farmers and fishermen living in quiet villages under the protection of a Shogunate.
In otherwords, exactly as the world found them.
The last 150 years will have been for the Japanese nothing but a brief diversion from the true art and craft of living.
Ethnocentric much? "Exactly as the world found them"? Yeah exactly as they were "found", but with an extra 100,000,000 people.
By 2060 I'll be dead.
Then why wait?
Its class warfare Ninja style, make a human live like a rabbit and they bred not.
Bullish for death panels
The answer is simple.
Japan needs more boners.
I believe that, in order to disarm the demographic time bomb that ticks ever more loudly with each passing year, Japan needs to take drastic action to produce more homegrown Japanese.
I suggest the following:
1. 24/7 mandatory porn at all venues. Shopping malls, restaurants, the dentist office, porn, porn porn.
2. Cialis in the water supply.
3. Mandatory push up bras and thongs for all women, even grandma, you never know.
4. National awards for prolific baby daddies.
5. Severe prison sentences for Japanese women that refuse to put out on the first date.
6. Free baby oil for the ladies. It is a fact that women look better when they are soaked in Johnsons Baby Oil.
With these sound principles and hard work, Japan can cum out of this crises.
Without my plan, it's domo arigato bitchez.
They've got most of that already.
As mentioned, the reason Japan's interest rates don't reflect 200% debt/gdp is because external debt is very low, and you can't default on yourself. So long as Japan can keep selling bonds to Japan Post bank there is nothing to worry about.
But as demographics shift, at some point domestic savings will be insufficient to cover government deficits and Japan will have to go offshore for bond buyers.
And 200% debt/gdp does not equal 1% on 10 year debt.
And this will hapen WAY before 2060.
They already figured it out, gold-backed bonds. All they need to do is issue enough of them with low enough yield that they can finance operations, and still have enough left over to import more gold, and they can keep it going for at least two more decades.
OMG. In just 50 years. What are we going to do? Where is my rabbit foot? I'm very concerned.
Tyler. You should be concerned about your own shrinkage, not Japan's.
" Lastly, we would love to see one of those charts showing how many working people will have to fund each and every retiree by the year 2060, first in Japan..."
I guess we are assuming that, given their recent little reactor problem, these folks live long enough to retire?
Hmmmmm.... massive social ponzi schemes suck the life out of populations? I seem to recall Japan has a staggering abortion rate. I seem to recall someone who worked in a hospital there who said they could barely keep up with demand.
The problem with long term predictions are the assumptions, not to mention Black Swans. Or the Singularity.