Is Japan Going Away?
The nation of Japan still wields the 3rd largest economy in the world. This makes it a very powerful nation. However, that does not mean it is without problems. In fact, Japan is dealing with an issue that is putting its entire future in jeopardy.
This is not the only country dealing with such a situation. Demographics are a part of the fate of many nations. When projecting forward, the forecast is dismal for the likes of China, Russia, and many of the EU nations.
Simply put, we cannot run away from the demographic make up of a nation. And this has profound impacts economically
Perhaps the lesson of Japan can be heeded by the rest of the world. Thus far, few solutions were devised.
The Major Super Power
If you are old enough, you remember when Japan was China.
By the end of the 1980s, many were projecting that Japan would surpass the US as the largest economy in the world. It has a very strong stock market and the most valuable real estate in the world.
Japanese companies were the standard for everyone else. They were even glorified in Hollywood films.
Unfortunately, on the way to becoming the major super power, the country collapsed. Demographic issues started to have an impact. Today, Toyko real estate is still 40% below its peak in the early 1990s. We see the Japanese stock market off by over 25%.
And now we can add the YEN collapsing to the equation.
Somewhere along the line, the country started to implode.
Fastest Aging Population
Many who are pessimistic about the future of China point to Japan as the example. The former is about to embark upon a time period where its population mirrors that of Japan. While larger, China is going to overtake its neighbor as the fastest aging population before this decades is out.
Last year, Japan lost 628K people (the difference between deaths and births). This is a significant number for a country of roughly 125 million people.
With so many passing on as compared to those being born, is it too soon to question whether Japan will even be around in a decade?
A great deal of what we see taking place, when extrapolated out can really affect the country going forward. As populations decline, it becomes harder to maintain the same level of economic output. Part of this is because consumption obviously drops in relation to the number of people as well as their age.
With Japan, the population is radically aging bringing even more issues to light.
The Lost Generation
Japan is confronted with another issue as explained in this video. There is a lost generation of workers who are basically not in the workforce.
Those who graduated in the 1990s were not able to get jobs due to the national recession along with hiring practices in the country. This pushed them to never secure stable employment, instead opting (out of necessity) to live at home with their aging parents.
Many of these individuals completely removed themselves from society. This is a situation some are facing in China also.
Obviously, as the population ages, the ratio of young to old is altered. The economic impact is strained enough with so many receiving benefits and not enough workers to provide tax support.
According to the video we have another 1 million people who are effectively not in the workforce. Sadly, this is a number that is growing and efforts to integrate them back into the workforce have not succeeded.
It is hard to project where things will stand in half a century or more. However, the present path means that it is viable to question whether Japan is going away?
Demographics are not easy to reverse and this is exactly what Japan needs to do. Unfortunately, there are a number of other countries who are going to face the same situation over the next couple decades.
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BEER.Japan has one of the strongest economies in the world, but its young population is decreasing every year, so they may have problems in the future.
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A lack of young people is a problem for many areas.
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They continue to resist an obvious at least partial solution, increased immigration. A largely homogeneous society can have serious drawbacks.
That is true. They tend to be very ethnocentric as do the Chinese.
However, many proclaim that as the solution yet it could be problematic over the next half century as most of the developed world enters the same situation.
Thus we could have countries vying (competing) for people. In fact, this is my theory. I believe digital nomads will become the norm and countries will have to work on attracting people.
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As well, the efforts of the psychos like Gates and others to decimate fertility rates through various means will couple this and cause major havoc in lots of countries. It’s a shame that the overpopulation myth has taken hold with so many, we could certainly turn things around but not al will have that same success.
Hard to argue that.
Anyone who looks at demographics and understands how they unfold can see that we are facing a massive drop off in population over the next half century.
And this is without the nuttiness of these people.
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The problems generated by the demographic expansion in developed countries, such as Japan, coupled with the economic recessions of these countries over the years, have generated a series of problems that are not easy to solve, among them, unemployment among the most recent generations.
The solution to these problems is not easy, because solving them involves a series of issues that are very complicated; because ensuring jobs for a population that is growing exponentially, is something that requires economic growth and expansion that exceeds even the most optimistic expectations of projected real growth. Unfortunately, it is true that this situation will become more and more common in the coming years and decades for many developed countries, even those that do not face it so harshly today.
Your post is very interesting, thanks for sharing it. Greetings.
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The challenge I see is that, using Japan as an example, they hung onto their old ways of, for example, employing people, when things were still expanding. They entered the 1990s on a roll and the set back was viewed as just temporary. It was not.
Hence, the lost generation is a hard pill to swallow since and even more difficult to fix since times changed radically.
The question is will other countries adapt better or follow the same path. Even if the adapt, there are a lot of issues. However, not adapting is fatal.
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I very much agree with you, it will be difficult for any country in the world to adapt to this reality, but not trying is not a viable option and they will have to try different solutions so as not to do things in the same way as Japan, but in another way that leads to best results. Because it is a fact that they should at least try to alleviate the problem so that the new generations face it with less and less intensity.
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you wrote well in this post. When I was young, then in the late 80s and early 90s, everything in Italy was Japanese. Now everything is Chinese. I confirm and approve what you have written.
Covid variants will solve all demographic issues! ;)
They solve under population issues?
That would be interesting to see.
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To re-establish a normal population pyramid I meant. Less 80+ but this is sensitive stuff I fully understand.
I hate this "have a job or die" or you're a completely lost individual who may as well be dead system and mentality. All of these systems appear to be artificially held up. All information we can note and learn from to implement in our cryptocurrency, blockchain, and DAO models. Humans are so much broader than the job or die model. We need space to breathe and become who each one of us is individually. There are other aspects of each human being that are valuable and honorable that could be cultivated or encouraged or at least not shunned by society. The job model is far too rigid and artificially held up. Crypto UBI for all, or let's get that tokenization sped up so all people are free to exist without shame.
That is all well and good. The challenge is economic productivity is still required. People still need to grow food or produce toilet paper. There are products and services we cannot do without.
So no matter how we frame the economic system, or what we use for money, the basic equation of producing what is needed still holds. And when a country has an aging population, keeping that up can be difficult.
Spread that globally, and we can see how, in half a century, things could get rather squirrely.
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