With Abenomics seemingly a total failure (aside from managing to collapse the currency and living standards of the population - worst Misery Index in 33 years [7]) the demographic crisis that Japan faces just got more crisis-er. As NHKWorld reports [8], Japan's population continues to fall (4th year in a row) but what is worse, there are now 33 million people over the age of 65 (a record 26%), more than double the number under the age of 14 (16.2 million). The ministry says the population will likely continue declining for some time as fewer babies are born and society ages.
As NHK World reports, [8]Japan's government says the country's population continues to decrease and become grayer.
The internal affairs ministry estimates that the population stood at 127.1 million on October 1st last year. That's down 215,000 from the previous year, for a fourth straight year of decline.
[9]
The population comprised 61.8 million males and 65.3 million females.
The figures include foreigners who lived in the country for three months or longer.
The number of people considered to be of working age -- from 15 to 64 -- fell nearly 1.2 million, to 77.9 million.
The number of children aged up to 14 stood at 16.2 million. That's down nearly 160,000 from the previous year. They accounted for a little less than 13 percent of the total, hitting a record low for the second straight year.
The number of people aged 65 or over was 33 million, up 1.1 million year-on-year. They made up a record-high 26 percent of the population. The age bracket is more than twice the size of that for children for the first time since comparable data became available in 1950.
People born after the end of World War Two in 1945 accounted for more than 80 percent of the total for the first time.
The ministry says the population will likely continue declining for some time as fewer babies are born and society ages.
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As we discussed before, [10]there are now 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.
[11]
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 and has passed a bill giving private-sector workers the right to remain at their jobs until the age of 65, rather than the current 60.
[12]
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.
[13]
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.
