NEW YORK — Experts agree that low birthrates have played a central role in Japan's transformation from an economic superpower in the 1980s to a country facing a severe economic crisis.
“Japan's number of consumers has topped off,” said Paul Hewitt, director of the Global Aging Initiative with the Washington-based Center for Strategic and International Studies. “The country has experienced 46 months of shrinking consumption, as well as a collapse in housing prices and land values. By 2020, Japan will have 18% fewer people in the home buying-market.”
Hewitt noted that in1995, 14% of Japan's population was over age 65, a figure projected to increase to 22% by 2010. “Japan is aging very rapidly, he said. “They are creating a generation without brothers or sisters, cousins, aunts or uncles.”
One of the consequences of Japan's economic stagnation has been a colossal accumulation of debt.
“They are borrowing too much money,” said Hewitt. “If their system collapses or they are unable to pay their debt it could lead to a global depression.”
Unless Japan's demographics change radically, analysts suggest the country's problems may be insoluble.
“The working-age population of Japan is expected to continually decline from 87 million in 1995 to less than 60 million in 2050, while the retirement age population increases to more than 30 million, almost guaranteeing a permanent recession from now on,” said Robert Sassone, senior researcher with the World Life League and author of the Handbook on Population. “The bad economy will make it even harder to pay for children, thereby causing additional declines in Japan's already record-low fertility rate.”
In response to the crisis some private industries have been offering incentives to encourage childbirth. For example, Japan's Bandai Corporation is offering mothers up to $10,000 for each additional child they have beyond their second, the New York Times reported last year.
Europe's Gray Future
As bleak as the situation appears in Japan, Hewitt said it is even worse in Europe. Europe's share of the world population, 20% in 1960 and already down to 13%, will fall to 7% in 2050, according to U.N. estimates. In fact, after 2010, Italy and Spain will grow older more quickly than Japan.
“The danger is that if a collapse occurs in all of these countries at about the same time we would face a serial crisis. If that were to happen, these countries' welfare states could disappear in an instant,” warned Hewitt.
Currently, there are 3.7 workers for each person of pension age in Europe. By 2050 this ratio will decrease to 1.5 workers for each retired person. “Germany, Italy, and France will experience severe fiscal pressures between 2004 and 2005 as their baby boomers begin to retire, and it will only get worse every year after that,” said Hewitt.
In March 2000, the U.N. Population Division released “Replacement Migration,” a report on migration as one possible solution for both Japan and Europe
The study looked at demographic data from eight countries: France, Germany, Italy, Japan, the Republic of Korea, the Russian Federation, the United Kingdom, and the United States. Its conclusions confirm what many demographic experts have predicted for decades — that most industrialized nations will require millions of working-age migrants to make up for a three-decade long birth dearth.
In the European Union, under current retirement practices, immigration would have to average 4 million people annually to compensate for projected declines in native-born workers. In Italy alone, to maintain the same work force it had in 1995, the country will need 300,000 immigrants annually over the next 25 years.
The British government, facing a severe skills shortage, last year relaxed its immigration controls for the first time in 30 years, allowing settlement by as many as 100,000 foreigners per year.
The U.S. Situation
Migration, said Ben Wattenberg, senior fellow with the American Enterprise Institute and author of the 1986 book The Birth Dearth, is what has kept the U.S. population stable.
“American fertility rates have been below replacement level for 28 years, yet the U.S. will continue to grow, in large measure because of the arrival of about one million immigrants each year. Still, because there is a mismatch between the large ‘Baby Boom’ cohorts [born in the 1950s and early 1960s] and the ‘Birth Dearth’ cohorts [that followed], America will face a pension shortfall,” predicted Wattenberg.
The grave international implications of the population implosion prompted the Center for Strategic and International Studies to organize the Commission on Global Aging. It is co-chaired by former U.S. Vice President Walter Mondale, former Japanese Prime Minister Ryutaro Hashimoto, and Karl Otto, former chief central banker of Germany.
Other members include senior executives from such corporations as Toyota, Coca-Cola and Olivetti, and demographers and other academic experts from leading universities and institutes in Europe, Japan and the United States.
According to a preliminary report from the commission, global aging will lead to a social transformation unparalleled in human history, placing burdens on health care and pensions, restructuring the economy, reshaping the family, redefining politics, and rearranging the geopolitical order.
The commission will make its recommendations public at a conference in Tokyo in August. Hewitt said that they will include encouraging people to work longer and pro-natalist policies that help young people raise families.
“My guess is that we are in for a lot of turbulence,” said Hewitt. “We will have to throw arbitrary ages of retirement out the window and work longer. All of the institutions we have created to deal with a labor surplus will be radically counterproductive. If we cannot adjust, we'll have a depression. We need leaders who see this.”
Tim Drake writes from St. Cloud, Minnesota.