The rapid population decline now taking place before our eyes in Japan stands as the countryâs greatest challenge since the start of the Meiji Restoration in 1868. A countryâs citizenry is the very basis of the state and shapes the health of the nation. Fluctuations in the population govern the size of the economy, peopleâs living standards , as well as the state of the nation and its power. Should the current birth rate remain unchanged, Japanâs population, which stood at nearly 50 million people 100 years ago, will shrink once again to 50 million by the end of this century. Moreover, this will not be a country overflowing with youth as during the Meiji Era (1868â1912). Japan will instead be an old country where the elderly account for 40% of that 50 million, according to the National Institute of Population and Social Security Research (IPSS).1 If this occurs, there is a strong chance that Japanâs social vitality and the vital forces of the state will be debilitated, jealous political rivalries will be unleashed, and people will lose confidence and become trapped in a spiral of pessimism and nihilism. No longer will Japan be able to maintain the culture and traditions it has nurtured over the centuries.
This must not happen.
It must not be allowed to happen.
To avoid such a calamity, Japan needs to devise an effective population policy . Such a policy needs both mitigation measures for staging a recovery in the depopulation process as well as adaptation measures for maintaining and improving living standards . A broad national consensus that spans the generations in support of this policy and the sustained political will to achieve it over the long term are required. To create a steadfast population policy both resolve and a broad-ranging consensus are necessary and can together be thought of as Japanâs âSecond Constitution.â Creating a Second Constitution is the greatest responsibility of people living today. With an eye toward the future, as human beings, we can all live for the next generation.
1.1 No Time to Lose
Establishing a population policy must start first by verifying the failure of previous policies (or, more accurately, examining the lack of a proper population policy ). This is necessary because to merely follow the same approach will only lead to failure once again.
The Japanese government first raised the issue of a declining population in the 1992 White Paper on the National Lifestyle, using the term âdeclining birth rate.â2 Until 1972, the government had subscribed to a theory of overpopulation. However, the demographic projections of the Ministry of Health and Welfare (now the Ministry of Health, Labour and Welfare [MHLW]) continued to publish optimistic scenarios for a recovery in the birth rate in its demographic projections. They expected to offset declines with population increases from the children of the baby boomers. This rosy situational awareness was the first stumbling block. Although as a matter of course the government should bear responsibility for this overly optimistic outlook, the general public also underestimated the economic, political and social consequences of a declining population . And although the government showed signs of comprehensively addressing the unprecedented low birth rate with its 2003 enactment of the Basic Act for Measures to Cope with Society with a Declining Birth Rate , its impact on reversing population decline was minimal. As a consequence, after peaking in 1995, Japanâs working-age population began to decrease, and the total population entered a phase of absolute decline after peaking in 2008.
In retrospect, the 20 years from 1995 to 2015, when the children of the baby boomers reached childbearing age , was a critical period. This was the era that had an irreplaceable opportunity to halt the population decline . And Japan missed it. During this time, the deterioration of the economy due to the collapse of the bubble economy and financial bankruptcies, coupled with greater flexibility in the employment base (i.e., the rise of non-regular employment) hit young people who should have been marrying and having children. When the dust had settled, the âlate marriageâ phenomenon, where there was an expectation that people would eventually get married, had transformed into a situation where not getting wed became the new norm. At the same time, the issue of an aging society was already the main social welfare priority, focusing on the problem of pensions , health care, and elder care , so that the declining birth rate problem took a back seat. The government, business community, and labor market also prioritized employment matters and the livelihoods of the elderly rather than focusing on the plight of young people and failed to make a committed effort to provide effective youth support.
More recently, the Abe administration has demonstrated its commitment to population issues, declaring, âwe will look into policies that diverge from previous declining birth rate policiesâ (in its June 2014 cabinet decision on Basic Policies for Economic and Fiscal Management and Reform 2014), as well as establishing a town-people-work creation headquarters in the Cabinet Secretariat. Nevertheless, an effective population policy outline backed by budgetary resources is yet to appear.3 One postponement after another has actually hastened the population decline in Japan and if the current birth rate remains unchanged, eventually there will be no Japanese left.
There is no time to lose. Another frightening aspect of this problem is that it does not end with the population. An aging and declining population , especially with a drop in the working-age population , depresses overall economic growth . Alongside Germany, Japanâs working-age population per capita gross domestic product (GDP) growth rate is the highest of the Organisation for Economic Co-operation and Development (OECD) nations, but the per capita GDP growth rate has remained around the OECD average. This is due to the drop in the working-age population , which is sharper than the overall population decline . It is estimated that Japan will fall into low growth averaging approximately negative 0.1% after 2040 if the population decline remains unaddressed and a state of productivity stagnation also continues.4 If the decline becomes steeper, it will lead to negative growth and eventually this will cause a collapse in the infrastructure of daily lifeâwhere people will be unable to conveniently access the necessary goods and services to live. In fact, this negative chain reaction has already begun.
Of Japanâs numerous failures over the past 30 yearsâneglecting the economic bubble, postponing dealing with nonperforming loans, economic stagnation, the Fukushima nuclear accidentâthe failure of crafting an effective population policy is perhaps the greatest failure of all. But why did it fail?
It seems Japan was not sufficiently aware of the policy peculiarity involved in the population issue, which is that various efforts tried to be effective without any long-term or comprehensive approach.
An aging society is defined as one where the proportion of those aged 65 and older is higher than 7%, a situation that had already occurred in Japan from 1970, the year of the Osaka Expo. On the heels of this event, the decline in the birth rate began. The birth rate in Japan has been falling sharply since the late 1970s, meaning that a situation where the population size can be maintained in the long term (population replacement level is currently 2.07) has already been unsustainable for 40 years. Like gravity, the accumulated pressure of this buildup is on the verge of crushing Japanâs population. Even if a nation tries to stave off a population decline , it would require a decades-long approach. And even if workers from abroad, or foreign workers, are introduced in a planned manner, it will take decades for people to become rooted in the new society as residents. The gestation period for an effective population policy is frighteningly long. Nations cannot, therefore, suddenly aim for the summit when responding to population pressures. Additionally, when dealing with an already accelerating population decline , policies are required on the one hand to correct for (mitigate) adverse effects, and on the other hand, to maintain a sustainable socio-economy in anticipation of the inevitable population decline.
Being forced to deploy this two-pronged strategy is not without its difficulties. Moreover, since population policy effects emerge only gradually it is difficult for political leaders to earn the political capital to implement, such policy achievements while in office. In short, no field is trickier to tackle politically than demographic issues. We need to be aware of these obstacles and when making recommendations on population policy the country needs to bear in mind the involved political difficulty enmeshed in such debates.
1.2 Four âNegative Chain Reactionsâ
Most Japanese were not fully aware of another factor: the speed of future population decline and the numerous negative chain reactions that accompany it. One major factor is the failure to create an effective national land policy in light of demographic trends. The government discussed a national land policy oriented toward decentralization, but in fact promoted the selection and concentration of regional population and economies, failing to pursue a vision of population relocation necessary for revitalizing the hinterland. This failure on national land policy mirrors those in forming population policy .
1.2.1 Risk that Population Decline Will Push Down Economic Growth and Shatter Public Finances
Japanâs economic growth rate has been gradually declining over the past two decades, with average real growth rate languishing around 1%. Although sluggish growth in the first half of this period was primarily due to the impact of the collapse of the bubble economy, low growth in the second half has been affected by the declining birth rate and an aging population as seen in the labor force population peak in 2007. Currently in Japan, the aging of the population is taking place at a much faster pace than the economic growth rate. A rapid advance in the a...