Japan’s Demographic Atom Bomb

Could you imagine living in a country that was about to die, or would virtually disappear as if it had been hit by neutron bombs that kill the people but leave the property intact?  Japan is just such a country, it’s dying, rather its people are dying at an alarming rate and the country will be mostly dead as a result of a demographic calamity in another hundred years or so if things don’t change.

A 2014 study of Japan’s demographics was recently published and the results were astonishing.  People are now paying more attention to the impending disaster.  Given current demographic trends, Japan’s population will decrease by 30% in the next 45 years with about half of all municipalities disappearing.  In the area of northern Japan where I live and much of rural Japan, about 80% of municipalities will cease to exist.  Imagine America with half of the cities and towns gone due to depopulation and several states with 80% of the towns erased off the map and you will understand the enormity of the situation facing Japan.

Japanese people and government officials are well aware of the problem.  People fret and say that “something needs to be done”, but there is little analysis of the disastrous economic and geopolitical effects and no analysis of the causes and potential solutions.  People really have their heads buried in the sand, perhaps because they think it’s going to be someone else’s problem when the country’s population falls from 125 million to 85 million and half of the remaining people are elderly.

But it’s not going to happen overnight, so people who are alive today and their children will need to deal with a shrinking economy, the costs of taking care of so many elderly people, and the security risks that Japan will encounter if it maintains it’s bad relations with neighboring countries while at the same time being less able to defend itself because it is depopulated and economically shriveled.

It is essential to the Japanese people that the demographic trend is reversed.  Japan will be a poor and potentially less secure place to live if nothing is done.

Why is it that Japan’s demographics have become so poor?  Every person and every family has reasons, but I believe it’s clear that there are a few social habits, but primarily severe economic reasons for the declining population.

Socially speaking, office workers are expected to work long hours and then go out socializing with coworkers after they leave the office.  These workers, often referred to as “salarymen”, typically work 6 days a week, returning home to a distant suburb late at night.  It isn’t difficult to imagine that they find it difficult to make children for reasons of being tired, unable to allocate time to family raising matters or spousal relationships.  This isn’t the main reason for a low birthrate.

The root of the demographic problem plaguing Japan is the weak economic situation that has continued since the bubble burst in 1990.  Due to government interventions and regulations, the economy has crawled along at a snails pace for a quarter of a century.  One of the most destructive regulations revolves around rules that make it almost impossible to lay off a permanent employee in Japan, so employers have responded by hiring fewer people on a full time basis and instead many people are hired for low paying short term contract work.  After a Japanese worker is forced to accept temporary work, it is very difficult to convince any employer to hire them on a full time basis.  With no permanent employment, and few job prospects, making a family is unlikely.

In addition to the weak and overly regulated labor market, it has been Japanese government policy to continually raise taxes to the point where they are almost the highest in the world for both corporations and individuals.  Under Prime Minister Shinzo Abe, the trend toward higher and higher taxes has been expanding, with the consumption (sales) tax to be increased by 100%, increases in income taxes, property taxes, social security taxes, gift taxes, inheritance taxes, and anything else the Japanese government can think of taxing.  The people have been squeezed dry by this enormous tax burden.

Government policy also encourages special treatment and protections for large companies so they don’t have to compete and can fix prices at a high level.  This is yet another heavy burden on the Japanese people, draining their pockets and leaving them without the means to raise a family.

With high taxes, an artificially high cost of living due to stifling government regulations and a vastly depreciated Yen, young couples find it difficult to make ends meet and many Japanese women have been forced into the labor market, typically into low paying jobs, just to be able to pay the rent and eat.  Instead of staying home to make and raise a family as many women would prefer, these women arrive home from work exhausted and without the time or energy to raise a family as they would want.  As a result of the high cost of living and women being forced into the workforce, Japanese families have fewer and fewer children.

short, the Japanese government is acting like a cattle farmer who fails to take care of his herd, shearing, milking, and slaughtering to excess, putting stress on the lives of the herd, and making it difficult to breed.  Unlike a farmer who would usually want to hand down a productive enterprise to his descendants, a democratically elected politician has little or no incentive to maintain “the herd” beyond his term in office.  Thus, ruling party bosses never seem to stop abusing and taking advantage of the people.

Precisely because people are not farm animals who need to be tended to, the solution is simple and easy.  All that needs to be done, indeed the only thing that can be done, to resolve the demographic problem is for government to leave people alone so that they can readily create a family, save, invest, and create enough wealth to support their families and offspring over time. By “leave alone” I mean stop taxing and stop trying to control the economy and peoples lives.  No more favors for friends, no more tax bills, no more restrictions on the ability to make a contract with an employer.

Sadly, I doubt that Japanese government officials would even consider letting people get on with their lives and flourish.  Japan has so many intelligent and talented people, not to mention lovely and charming women who would love to have a nice family, so it’s truly shocking that the country is on the path toward demographic destruction, thanks mostly to arrogant and incompetent politicians.