Government data released after the ‘Respect for the Aged Day‘ event showed that Japan’s elderly population had risen to an all-time high of 36.25 million. While the country’s overall population is declining, the segment of those aged above has grown to 29.3% of the population, the highest number in any country.
This data raises concerns regarding the country’s demographic shifts and labour shortage. A survey from Teikoku Databank last month showed that 51% of the companies across sectors feel that there is a shortage of full-time employees.
“The labour shortage is just as bad as ever,” said Robert Feldman, chief economist at Morgan Stanley MUFG Securities, noting that it’s especially felt in labour-intensive industries such as food service.
According to the 2023 Statistic Bureau report, Japan’s elderly workforce, aged 65 or above, rose for a 20th consecutive year to reach 9.14 million.
Now, Feldman informed that the elderly workforce will soon begin to retire, giving opportunities to a new and young population. The government will likely reform its pension system and consider raising taxes to fund healthcare and social security services.
According to the National Institute of Population and Society Security Research, the elderly population in Japan is expected to rise to 34.8% in 2040 based on recent data.
The consequences of the elderly workforce are profound. With a small number of young workers, the country may face slower economic growth.
The Japanese government has taken corrective measures, such as withdrawing declining birth rates policy, with new rolling out new policies like providing more funds for child-rearing and supporting more child-care facilities.
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While supporting the central government, local governments have also taken steps to encourage the public to use dating apps. Boosting birth rates will do little to solve the country’s labour shortage.
