Posted on 12/12/2006 1:15:43 PM PST by Tolerance Sucks Rocks
TOKYO -- The decline in Japan's population could undermine the country's economic recovery unless workers perform more productively, and the new economy minister is taking aim at inefficient industries and workers.
Hiroko Ota, who took office in September, faces an economy that is back on track after more than a decade in a slump. Japan's big structural problems have mostly been fixed: The banks have cleaned up their bad loans, and prices have stopped falling. Japan's economy grew at an average of more than 2% a year from 2003 through 2005, and it is expected to grow another 2% or so a year in 2006 and 2007.
But long-term challenges remain. Japan's huge national debt amounts to 175% of gross domestic product, compared with 64% in the U.S. Cutting the debt gets harder with a falling population because Japan has fewer tax-paying workers. If production per worker increases more slowly than the number of workers falls, overall economic production will fall.
"Japan has escaped from its downturn," the 52-year-old Ms. Ota said in an interview. "We need to improve productivity more than the population declines."
Japan, like mature economies in Europe, is engaged in a major rethinking of its economy -- including how to pare down welfare states along with the job and market protections introduced during the years after World War II. These changes now are seen as barriers to growth.
Former Prime Minister Junichiro Koizumi started the process, cutting public spending, deregulating industry and reducing the number of public employees. His successor, Shinzo Abe, has pledged to continue small-government policies while creating a platform for growth.
(Excerpt) Read more at online.wsj.com ...
It used to be that one reason for having lots of kids was so that you could have somebody take care of you when you were old. The eldest son could be counted on, because he would be counting on inheriting the family farm if he fulfilled his duties. But with pensions and retirement accounts, that incentive goes away
Quick fix: change the tax laws so that a percentage of taxes paid by children go directly to their retirement-age parents.
Having spent significant time in Japan and observing the Japanese at work, I can safely say they treat their women like crap.
It is a wonder that they breed at all.
C.W.
Sounds good. I only wish that we over here could do the same.
Percentage of population by age in Japan.
0-14 years: 14.2%
15-64 years: 65.7%
65 years and over: 20%
Birth rate: 9.37 births/1,000 population
Death Rate:9.16 deaths/1,000 population
As you can see their death rate is only slightly lower then their birth rate. When you add in that the number of those over 65 is vastly greater then those under 15 you have a population in decline.
If you do not have people entering the work force at the same rate as you have people leaving it then you have a problem.
Greater efficiency will help, for a time, with the work situation but they need to figure out what social pressures are causing the decline.
They are and that is not the wonderful thing. The wonderful thing is that when they were at 90 million they were worried about overpopulation, and now they are way over 100 million, supposedly way into overpopulation, and worried about depopulation. Is that not amazing?
There are a couple of approaches to change. One is to say 'oh no, things are changing all is lost.' Another approach is to say 'change is inevitable, let's make some adjustments.' Population can be a tricky thing to manage. In Japan they seem to prefer to find Japanese and hardly anybody else. But they could bring in some african moslems to tide them over. That might be an interesting clash of ethnicities.
These two things cost a nation far more than any "welfare state" in the classical sense of the term.
Japan will adjust and be ok. They will need to make some cultural adjustments.
I doubt they will import though. That would be a bit to much of an adjustment for them.
You are right. That's a good question. Eventually, the concept of "retirement" may go away again. Retirement is a relatively new concept in historical terms so this may not be such a bad thing. There are going to be a lot of elderly leeches that are going to be unhappy though.
It went away because people bought into the concept of Uncle Sugar taking care of them in their old age. Too bad Uncle Sugar is a thief with no sense of accountability. There are going to be a lot of unhappy baby boomers not all that terribly far into the future. I, for one am not going to be having much sympathy for their attempts to pick my pockets.
Quick fix: change the tax laws so that a percentage of taxes paid by children go directly to their retirement-age parents.
A better idea would be to change the tax laws so that every dime you pay goes to private accounts. Those without retirement money will either have to figure out some way of making some, or go on welfare, which is basically what SS really is.
they don't need more efficiency; they need more babies!
Social security, IRA's, pensions -- all of them depend on the assumption that there will be a next generation who will pay the taxes and be employed in the businesses that will pay the dividends and capital gains to keep it all afloat. Without a viable next generation, it doesn't matter how you've invested your money.
The middle class needs an incentive to reproduce, and the underclass needs a disincentive. We currently have it backwards
Who needs people?
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