Japan's Demographic Death Rattle In 3 Charts And 333 Words

Tyler Durden's picture

Courtesy of Bloomberg's Michael McDonough, here is how the end game for demographically defunct, deflationary debt holes such as Japan looks like extrapolated into the future. And for the time-strapped it is condensed into 333 words and 3 charts.

Via Bloomberg Brief:

In less than two years, more than one in four Japanese citizens will be over the age of 65, up from one in five in 2006 and one in 10 in 1985. The proportion of the population over 65 is expected to swell to 30 percent by 2022 and to 40 percent by 2050, according to government estimates. This will put the country as a whole in the demographic range of the prefectures that experienced the sharpest declines in growth in the decade ended 2009.

Fewer workers and less labor will reduce the potential output of the Japanese economy, which will increase the country’s reliance on imports as retirees continue to spend, inhibiting GDP growth. The rising number of retirees will strain the government’s welfare programs and the country’s pension funds, which have been major buyers of government bonds. Japan already maintains the world’s second-largest debt load in nominal terms at more than $13.7 trillion and growing.

The government sees this problem. Last week, Japan’s lower house of parliament passed a bill giving private-sector workers the right to remain at their jobs until the age of 65, rather than the current 60.

Japan’s demographics will also likely have an impact on consumer behavior. Japanese consumers older than 65 are less likely to shop for alcohol, clothing, books and electronics compared with younger consumers, according to a McKinsey survey from 2011. The average senior shops for books and clothing 38 and 35 times per year, respectively, compared with 73 and 58 times for people between the ages of 18 and 34. The only item seniors shop for more frequently than younger consumers is food, McKinsey found.

How Japan faces its demographic challenges over the next several decades may provide important lessons for countries
such as China, which has a rapidly increasing senior population due largely to the one-child policy. People over 65 account for nearly 10 percent of the population in China — similar to Japan in 1985 — up from 6 percent 20 years ago.

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Precious's picture

Oh no!  By 2050 Japan will have the same number of people as South Korea !

Until then ... all those damn old people.   Who will take care of them? 

Anyway, Japanese only copy stuff.

TrillionDollarBoner's picture

That's a darn small boner you have there

GetZeeGold's picture

 

 

Yeah.....but it glows in the dark.

 

GMadScientist's picture

Be nice, can't you see the man lost a ball?

Oh regional Indian's picture

Yup, Japanese workforce has long been button pushers on massive robot-ized factories anyways. First Fondly Provided by FANUC+GE+GM, + Mr. Deming of course.

Robot nation indeed.

ori

Gavrikon's picture

A horribly overcrowded country is going to become less so, while seniors are assisted by their robots and automated labor saving devices.

What's not to like?

Oh, excuse me.  I forgot.  It isn't Die-verse enough.

CptNerd's picture

Only the Tokyo and Osaka megaplexes are "horribly overcrowded", and they seem to handle it well.  I rode out into the countryside to the north and most of the country outside of cities is no more "overcrowded" than rural Ohio or Indiana.  Tokyo is like a Los Angeles-sized Manhattan Island, but it's nowhere near a "Make Room! Make Room!" dystopia.

Big Slick's picture

From an analytical standpoint, Figure 1 is poorly constructed as the independent variable (in this case age) should be on the x-axis and the function of x (f(x), GDP) should be the vertical axis.  Someone at Bloomberg must have been sick the day they taught this in Junior High School.

Totentänzerlied's picture

It's free. Turn your head sideways.

timbo_em's picture

Long adult diapers, short baby diapers! That has to be the no brainer trade of the decade.

Haager's picture

There is one simple solution: Back to work, folks! OK, you may take hold of your wheelchair, otherwise use the walker.

Peter Pan's picture

An even more effective measure is DYING AT WORK. Make no mistake, this is where we are all headed IF we can find work.

JimBowie1958's picture

In the next couple of decades, energy will become so cheap and nanotech manufacturing so individualized that people wont need to spend much money and the need for cash will diminish also.

But without this in perspective, the future does seem rather dismal.

Cheer up.

Haager's picture

How comes that my view at least on the price of energy does differ that much?

JimBowie1958's picture

Not sure exactly what you mean, but you seemed to be caught up in this dystopian view that the future is all pain, misery and despondence.

Technology is about to make all our old problems obsolete because we will have abundant and cheap energy and personal manufacturing of what we want when we want it in our own homes. By 2030 no one will be worrying about unemployment. If you dont work but three months out of the year that will be fine for everyone except those driven by things other than a desire for money.

Those who work will largely do it for the love of what they do at work.

duo's picture

Japanese old people are infinitely more fit than their US counterparts.  Diet and walking to pretty much everything have a lot to do with it.  I don't think an elder Japanese would expect a free knee replacement if it meant one of the youngest generation wouldn't be able to afford college.

Thisson's picture

You're close.  The solution is to stop subsidizing non-productive classes and giving them free stuff.  It makes no sense for us to try to prolong life expectancies to 100+ years with socialized medicine and entitlements when people cannot produce and save enough, during their lifetimes, to sustain them to those ages.  Working for 40 years, then having a 40 year retirement, is not possible.  People need to have an incentive to live healthy lifestyles and save for their own futures.

mayhem_korner's picture

The government sees this problem.

 

Yes, like the First Officer saw the iceberg right after he heard a loud crunching noise...

It's nothing a gold medal in women's soccer can't fix, right?

Praetor's picture

How about three words: They are fucked.

GetZeeGold's picture

 

 

Your Nobel Prize is in the mail.....hell why not? Everyone else is getting them.

 

_ConanTheLibertarian_'s picture

sorry, you will have to bribe your way to a Nobel prize nowadays

gaoptimize's picture

I think I might share William Bonzai's perspective on this when I say the GDP is the second worse consequence of this.  The most tragic is the decline in the number of beautiful, intelligent, creative, gentle and loving Japanese women.  A while ago, I saw a video of this beautiful lactating Japanese woman absolutely gushing and squirting milk from her large vascular breasts while getting off on a vibrator.  Unlike GDP, this life-creating and nuturing beauty can not be replaced as it diminishes.  No, humanity is fucked as Japan declines.

Jumbotron's picture

Are you sure you weren't watching Hentai ?

MachoMan's picture

For every one of those you have a tubgirl or an eel shooter...  definitely a mixed bag...

aside from the whole sex cry/whine thing...

Totentänzerlied's picture

Cultural phenomenon. Once they go abroad, they're almost as stone silent as any English girl.

Precious's picture

99% of that shit is non-Japanese claiming to be Japanese.  But how would you know, from your room.

Itch's picture

There is too much fantasy in that society, too much bullshit. There is nothing wrong with the women at all, they are all full of energy. Its the men, they are all playing fucking pokemon and wearing diapers to discos. The men have been feminised somehow, limp...personally i think they are hung up about their pencil dicks, but that’s another topic.

Precious's picture

I don't know about all that, but I can guarantee you that no Japanese guys want to fuck your fat American daughter.

youngman's picture

"as retirees continue to spend"....only on rice and fish......they are not going to buy much more....and the bonds will have to be sold to pay their pensions....immigrants...no way...Japan is a closed society..can they change that....doubt it..

mayhem_korner's picture

and the bonds will have to be sold...

 

Them words will earn you the "terrorist" label, mon ami.

Totentänzerlied's picture

"The average senior shops for books and clothing 38 and 35 times per year, respectively, compared with 73 and 58 times for people between the ages of 18 and 34."

I don't think I've shopped for those items that many times in 10 years - books are free these days (but I lost all mine in a boating accident!). Japan was the proving ground for consumerism, they got it fastest, hardest, and if you please, best-est. And now it's time to pay the Kabuki piper. And yes, their young people, differently for either gender, were thrown under the Keynesian bus. Are they not so very like us...

mayhem_korner's picture

 

 

"We've fallen and we can't get up."

GMadScientist's picture

Quick, what's Japanese for "Running Man"?

Mercury's picture

Death rattle? - not quite.

All age-related demographic problems are temporary by definition.  Eventually we will envy their demographics. And, if they're lucky, the Japanese may actually come to appreciate the considerable downside of the comprehensive welfare state before we do - and adjust accordingly.

The Japanese will ride out this particular problem better than the US because they are much more amenable to the idea of sacrificing for their neighbors with whom they have more in common than most Americans do with each other.

One day Japan will have a smaller, much younger population with strong, common cultural ties to each other and The US will have an increasingly Balkanized (but diverse!) population that is unassimilated to a common set of cultural values/standards and very distrustful of other groups with whom they constantly fight and compete for government favors.

And since Japan doesn't really really do immigration they are a good control group in this context.

Uchtdorf's picture

When the US military is getting its tail kicked in the Mid-East and southern Asia, the remaining troops in Okinawa will be unable to defend the Japanese mainland. Japan will then be controlled by a larger neighbor. 1000 bonus points to anyone who can guess who that might be.

Mercury's picture

That's certainly a possibility...the old grudge match.

Thisson's picture

No, because when the US defaults, China will idle its factories and will have massive unemployment and social unrest.  So they will be busy stabilizing their own regime and won't have the ability to repress Japan.

Kobe Beef's picture

Who's to say the Chinese won't keep their factories running and stabilize their regime by invading Japan?

I could be wrong, but history provides many examples of precisely this kind of warmongering.

JimBowie1958's picture

The Japanese will ride out this particular problem better than the US because they are much more amenable to the idea of sacrificing for their neighbors ...

Are you suggesting the old will simply commit mass suicide?

Lol, why cant Malthusianists eve lead by example?

 

Mercury's picture

No, I'm saying they will endure austerity and "shared sacrifice" better than Americans will.

JimBowie1958's picture

Why isnt your statement an example of cultural bigotry?

Why do you make broad statements about 'Americans' as though we are all the same? Some of us will suffer, most of us will do well anyway and then help the ones who need it. What you say is true on average, but a person with the left hand in boiling water and thier right in liquid hydrogen should be OK on average, so averages dont really mean anything significant necesarily.

No nation that has a negative population growth rate is successful, happy and prosperous. The former is usually caused by the latter, but there is some causal looping in there as well.

Totentänzerlied's picture

Sure we share common values! Hope, change, your EBT balance, fairness, shared sacrifice, all that good stuff Obomba ignorantly prattles on about week after Kafkaesque week.

KidHorn's picture

The solution is to allow immigration. Like how the US allows young mexicans in. Otherwise we would be in a similar situation. Not that we're not screwed anyway.

aerojet's picture

The social consequences of letting in Mexicans is mind-boggling.  You have to remember that in the non-politically correct days of yesteryear, when the US was far less populated than now, Americans considered Mexicans to be something along the lines of cockroaches that needed to be swatted before they got across the border and established a foothold. 

Coreadrin's picture

Yes, and now Mexico's economy is actually expanding, capital is moving into the country, their demographics are extremely healthy on the long term, prices are still cheap and investment bargains can be had.  To top it off, they are considering legalizing drugs completely, which will destroy the violent crime.

Meanwhile the rah-rah's in the good 'ol USofA want to lock the gates.  You won't have to.  Immigration rates are down like crazy over the past decade (opportunity?), and the only thing left keeping people piling to get in is that they can land with their hand out.  The US is attracting a wonderfully massive class of parasite voter to keep existing power structures "legitimate" (majority consensus), while the ever shrinking pie keeps on withering.  The number of professionals immigrating to the US, the number of business owners, is dying off.

The US is a culture in decline.  It is Rome, it is the British Empire, it is Bohemia.  All of the EXACT same policies have been adopted by the political class, only this time the entire globe is awash in more debt than at any time in human history, and this by a long shot.  There are not too many opportunities left, and, sadly, they are not on home turf...

Seer's picture

"Immigration rates are down like crazy over the past decade"

PLEASE!  Please qualify these terms!

There has been NO reduction in the legally set immigration numbers.  I suspect you might be meaning "illegal" immigration.  This is a BIG difference!  Being loose with such terms tends to breed ignorance in folks, to the point that they do shit like what just occurred in Wisconsin.  I am ADAMANT about this as I have a spouse who LEGALLY immigrated.

"The US is a culture in decline."

The US has a culture only in the loosest of sense.

"Decline" is a decline in/of GROWTH.

"The number of professionals immigrating to the US, the number of business owners, is dying off."

A "number" is dying?

"The US is attracting a wonderfully massive class of parasite voter"

This seems to contradict your statement "Immigration rates are down like crazy over the past decade"

I think that this is a more correct version of this:

The US is CREATING a wonderfully massive class of parasite voters

(and I'm sure that it's Obama's fault)