by Tyler Cowen
on October 3, 2015 at 2:19 am
in Current Affairs, Data Source, Economics
Japanese females quietly overtake American females in terms of #labor force participation.
Noah writes: Note the big jump and trend break when Abe took office.
And the Japanese ones are more chic too.
“Just more of the same” said Ronald Brak as he turned the water temperature of his bath up from 120 to 130…
This will fix that population shortage of theirs right up, surely.
If you’ve ever been to a Japanese city, and it’s very hard to go to Japan without going to one of their cities unless you arrive by North Korean submarine, you’ll see they don’t actually have a population shortage. It’s actually kind of crowded, by my standards anyway. However, Japan’s population started to decline last year and a number of people are concerned about the effects that will have and currently is having. However, one projection pegs their population as still being about 65 million in the year 2100, or about half of what it is today, and that will put its population density at close to that of current day Switzerland. (Which may not be a bad comparison as they are both very mountainous countries.) Of course, we can’t put much faith in population predictions that are 85 years out.
The bigger problem isn’t so much reduction in population as in the overhang of seniors that will occur in the process. Of course this affects more than just Japan but they will be among the first and hardest hit.
An increasing portion of elderly is certainly an issue, but the process has been occurring for quite some time now so it is really just more of the same. It’s considerably more advanced in Japan than most countries, but despite getting most of the press it is not quite in the lead. Germany’s median age is apparently just a smidge higer than Japan’s, and Japan’s life expectacy is a few years higher which should improve the ratio of the firm to infirm. Japan’s retirement age is lower than Germany’s, but I don’t actually know what the portion of the elderly in paid employment are in each country. But one Japanese plant manager I knew reached retirement age, took a day off, and the next day started work at the plant as a regular hire with a very large cut in salary. In 2012 Germany accepted almost two and a half times as many immigrants per capita as Japan, so Germany appears more willing to slow the demographic change through immigration than Japan.
In 2012 Germany accepted almost two and a half times as many immigrants per capita as Japan, so Germany appears more willing to slow the demographic change through immigration than Japan.
Or to put it another way, in 50 years time Japan will be Japanese but poorer. While Germany will be Northern Turkey. And poorer.
Germany is not slowing anything. Their leaders are just so self-loathing they have decided to abolish themselves.
Well, So Much For Subtlety, it has taken people of Turkish descent about 40 years to reach 1% of Germany’s population. So assuming a geometric progression they might be 4-5% of the population in 50 years. So if that will cause Germany to become Northern Turkey, then looking at the list of US ancestries I am forced to conclude that the United States of America must actually be Western Italy.
“Well, So Much For Subtlety, it has taken people of Turkish descent about 40 years to reach 1% of Germany’s population”
Alas, life for the factually challenged. See “Turks in Germany” (Wikipedia) and “Demographics of Germany” (Wikipedia). Quote
“3.7% of the population had a Turkish background.”
A few years ago, Thilo Sarrazin was viciously criticized for claiming that Germans would be a minority in their own country in a generation or two. As it turns it, he was wrong. The demographic transition is occurring faster than he ever claimed.
From a prior post
“Take a look at “Berlin Gets Bad News From PISA – The world as it will be, not as we want it to be…”. In Canada, PISA scores for immigrants come close to the natives. In Australia, immigrants (and their children) do better than the natives.
By contrast, immigrants to the U.S. don’t reach native levels of performance even in the second generation (actually the second generation does worse than the first). Of course, the U.S. is a success story compared to Germany, France, etc. In Germany, immigrants massively under perform the natives in the first generation and only marginally improve in the second.”
Thilo Sarrazin was also viciously condemned for making that point as well.
By the way, Martin Wolf showed that immigration can not be (practically) used to slow that aging of the population. See “The benefits of migration are questionable” (in the FT). Quote
“Thus immigrants lower the ratio of the retired to those of working age (the old-age dependency ratio). But the impact on dependency, at least with current levels of immigration, is modest. To lower it substantially requires enormous inflows.
In 2014, there were 29 dependants aged 65 and over for every 100 people of working age. According to the UN, keeping this ratio below a third would require immigration of 154m between 1995 and 2050, with far more thereafter: immigrants age, too, after all.”
Of course, Wolf is referencing other sources. Numerous studies in the U.S. and abroad have shown the same thing. Immigration can not solve the problems of an aging society. Indeed, without exception (in my experience) the studies are strongly biased towards immigration. How? Because they assume that the immigrants will have the same earnings and welfare-state costs as they natives. In real life, that is very untrue. Many (probably most) immigrants in the U.S. and Europe are cradle-to-grave burdens who never support anyone, even themselves.
See “Is the United States Bankrupt?” by the St. Louis Federal Reserve.
“Second, it is mistake to think that immigration can significantly alleviate the nation’s fiscal problem. The reality is that immigrants aren’t cheap. They require public goods and services. And they become eligible for transfer payments. While most immigrants pay taxes, these taxes barely cover the extra costs they engender. This, at least, is the conclusion reached by Auerbach and Oreopoulos (2000) in a careful generational accounting analysis of this issue.”
However, that’s the good news. The reality is that low-skill, Hispanic immigration is a disaster for Social Security. Why? Social Security is a progressive system. Low income workers get much more from it, than they put in. The reverse is true for higher income recipients. Of course, higher life expectancy adversely impacts the economics of they system. Given that Hispanics have low incomes and high life expectancy, they are obviously not going to save the system.
Of course, a more detailed analysis yields even worse results. See “The Fiscal Cost of Low-Skill Immigrants to State and Local Taxpayers”
“In 2004, there were 4.54 million low-skill immigrant households. The average net fiscal deficit per household for federal, state and local spending combined was $19,588. This means that the total annual fiscal deficit (total benefits received minus total taxes paid) for all 4.54 million low-skill immigrant households together equaled $89.1 billion.”
“In FY 2004, the average low skill immigrant household received $30,160 in direct benefits, means-tested benefits, education, and population-based services from all levels of government. By contrast, low-skill immigrant households paid only $10,573 in taxes in FY 2004. A household’s net fiscal deficit equals the cost of benefits and services received minus taxes paid. The average low-skill household had a fiscal deficit of $19,588 (expenditures of $30,160 minus $10,573 in taxes).”
Peter, 3.7% have a Turkish background you say? Well then, I was wrong. Looking at the ancestry table I see that the United States must actually be Western Germany.
And I must say you all have remarkably good English. One of the benefits of the Teutonic education system I suppose.
The educational systems of Germany and the USA are almost exactly equal. See “The amazing truth about PISA scores: USA beats Western Europe, ties with Asia” (tino.us).
That’s the good news. The bad news, is that the immigrants Germany is actually getting perform dismally in the first generation and don’t improve (significantly) in the second generation.
I mean, if you treat Yokohama Shopping Trip as a utopia, that sounds acceptable.
But maybe they don’t want their nation to be a national retirement home/creepy ghost town.
If “they don’t want their nation to be a national retirement home”, they’d have more children. Cease projecting your odd preferences about other people’s fertility, the market says they are happy with what they have.
“The market” says nothing of the sort. What market would that be, by the way? The black market for babies?
Population density in Japan, as in Europe, is much greater than in the U.S., where sprawl is the pattern, especially in the sunbelt. At least seniors in Japan and Europe reside in or near urban areas where the jobs are, if they choose to (or must) work. Not so in the U.S. Anybody who has visited central Florida knows what I mean (I’m distinguishing inland Florida from the coastal areas). Those sprawling retirement cities are far from the urban areas where the jobs are. For now, this limits job opportunities for seniors who reside there. But what happens when the retirees are gone, what happens if their descendants choose not to reside there, what happens to these “new cities” when few wish (or can afford) to live there? Will they become ghost towns? I think about this whenever I visit central Florida (which is often), as I knew the central Florida that existed when I was a child, which couldn’t be more different than the central Florida today. The fate that awaits central Florida (abandonment) may well be far worse than the fate that awaits coastal Florida (flooding).
“But what happens when the retirees are gone, what happens if their descendants choose not to reside there…”
You already see that in my wife’s hometown in northern Michigan. They had a surge in seniors in the ’90s due to generous buy outs and high real estate prices. Now those people have reached the age where many no longer live alone and nobody is replacing them. As a result, the town is dying.
Can you explicate a little? I’m confused as to why high real estate prices would be a draw for seniors? Or are you referring to the places that they were leaving, so they were flush with cash?
The moved to the town after selling the high-priced real estate somewhere else.
Sustainability. I think about that often. When one assesses the U.S. today, it’s clear that sustainability is not high on people’s list of priorrities. What’s the sustainability of a sprawling retirement community located far from an urban area? What’s the sustainability of the U.S. economy if middle class jobs are sent overseas? What’s the sustainability of a transportation system that relies so heavily on the automobile? Of course, people believe that tomorrow will be just like today. But it won’t. If tomorrow won’t be like today, the dilemma is predicting what tomorrow will be like. Tabarrok has confidence in prediction markets. But where are the prediction markets for sustainability? Where were the prediction markets when U.S. business hollowed out the U.S. middle class by moving middle class jobs overseas? No, sustainability is not high on people’s list of priorities, definitely not up there along with short-term profits. There’s a deep strain of inevitability to decision-making by business, as if what happens is inevitable and the only option is to accurately predict the inevitable. It’s an apocalyptic view, not an enlightened view.
I’m glad you’re here to tell us the future of what is or is not sustainable. Did you ever think that what you consider to be sustainable could be completely wrong? A developing middle class in China might be better for the US and US businesses in the long run then low skill manufacturing jobs or it might not. Only time will tell.
the splendidly monikered ‘ZZZ’:
& a great framing, transmogrifying sustainability to something that ‘might be better for US businesses’!
The Chamber of Commerce never sleeps, trolling seven days/week!
We’re glad YOU’RE here, too! [barf]
In the short term, prediction markets are pretty good. Beyond a few years, not so much. At the peak of the Tech Bubble, Housing Bubble, Oil Bubble, etc. markets were predicting bubble-mania forever (essentially). Of course, that didn’t happen.
Or were they predicting some % chance of continued explosive growth and some percentage chance of a slow-down?
Of course, there was always some chance that pets.com would be a great success. Not zero, but pretty close. When the stock market doubled in the year before the crash of 29, there was some chance that it would keep going up. Not zero, but pretty close. When the NASDAQ doubled in the year before the crash of 2000, there was some chance that it would keep going up. Not zero, but pretty close.
“Sustainability. I think about that often. When one assesses the U.S. today, it’s clear that sustainability is not high on people’s list of priorrities.”
Delusional thinking on this point is near universal on the left and right. Here is a typical example from the right. See “Cheaper sugar” by John Cochrane. Quote “When other countries sell us sugar, they get dollars, of every single one ends up buying US exports or invested in the US.”
Of course, in “investment” is just a weasel-word for debt. John Cochrane thinks that a trade policy based on exchanging goods for debt is sustainable. Beyond parody, but actually rather common. Apparently, AT and TC agree with Cochrane.
I agree with Cochrane as well
“At least seniors in Japan and Europe reside in or near urban areas where the jobs are..”
Isn’t it far more efficient to have your non-working seniors located in a comfortable climate out of the expensive cities, thus freeing up that expensive city real estate for the people that are actually working?
Note the drop when Obama took office. In the good ol USA.
Yeah probably has nothing to do with the massive economic crash of 2008…
Under Bush an almost equal drop.
Blaming Obama for the crash when he took office doesn’t make sense. The economy started crashing well before election day (with September 15th, 2008 possibly being the critical day). However, the dismal recovery since then is on Obama’s watch. Like it or not, Obama (and most Republicans) favors the status quo.
The Obama economic policy amounts to “ship every possible job abroad and then import foreigners to take the remaining jobs”.
Guess what? That yields declining female (and male) LFP. Japan restricts immigration and is doing better.
And someone is surprised?
Female participation fell under Bush I, rose under Clinton and fell under Bush II and Obama (now it is back where it was in ). Are we to suppose that Clinton was the only president who got the economy (mostly) right in 25 years and less of a globalist than both Bush and Obama? Even under Bush’s bubble participation never got back to Clinton’s numbers.
Take a look at “Civilian Labor Force Participation Rate: Women” (Series – LNS11300002 – FRED). There is clearly a post-WWII trend towards higher female LFP from the 1948 onwards (and probably before 1948 as well). The fastest growth was actually in the 1970s, but the trend continues strongly into the Reagan period. The small downturn under Bush (41) is obviously recession related. When Bush (41) left office, female LFP (57.7%) was higher than when he took office (57.1%).
The uptrend in female LFP continues (slowly) until Clinton and then reverses (slowly) under Bush. It then crashes under Obama.
Clearly, we are seeing a combination of deep structural changes in society (spanning many decades) and much shorter economic cycles. Under Reagan and Clinton, the U.S. generated enough jobs to support higher levels of female LFP (and considerably better male LFP numbers). Under Bush and Obama things have gotten worse for both men and women. For men, LFP fell under Bush and then crashed under Obama.
Clinton was somewhat less of a globalist than Bush (43) or Obama. Better yet, the Tech Bubble masked a multitude of sins. The Tech Bubble imploded and Bush (43) responded by cratering the U.S. economy with his “free trade” / outsourcing policies and pushing immigration petal-to-the-metal. Male / female LFP suffered accordingly. Obama has continued the Bush (43) madness (because he believes in it). There results (under Obama) have been a disaster.
Two useful notes. The U.S. trade deficit reached its all-time high under Bush (43) and 2000-2010 was a record decade for immigration. I don’t really think that Clinton was/is less of a globalist than Bush or Obama (in his heart). However, circumstances were different and Clinton had the Tech Bubble. Bush and Obama have chosen to be hard-core globalists in a very different time with dire consequences.
lets try a 10-15 year experiment: severely limit immigration and enforce current laws. Let’s see if it drives up wages and triggers a bit of the inflation the Fed so desperately wants.
Perhaps it will foster some innovation in automation so we don’t have human being pulling turnips at slave wages. It’s 2015: shouldn’t it be considered immoral to eat food harvested by back-breaking labor?
You know, there was this economist named Solow who won a Nobel prize for modeling what happens when you have higher inputs per worker. He seems out of fashion now.
“It’s 2015: shouldn’t it be considered immoral to eat food harvested by back-breaking labor?”
More than denying workers much needed jobs because they are from the wrong race, you mean?
No, I thnk the only reason there hasn’t been more automation on the harvesting-side of agriculture is that it’s currently cheaper to just keep forcing people out into the fields at such low wages. It seems like a matter of ethics at this point. Stoop labor in 2015 has no place in a modern society unless they are much more highly compensated.
People say there are crops that can’t be harvested mechanically; well, then, perhaps we shouldn’t be eating those foods. Or they should at least carry a warning.
“Forcing”? As in hunting them down in Mexico or Peoria or wherever they got those laborers, chaining them and shipping them to Arizona? Seriously you have all the right to be racist, but maybe you should be honest about your intentions.
“Unless they are much more highly compensated.”
Evidently the jobs-if they even exist- the newly-freed laborers will get will be much more higly compensated–that is why they deluberately ovelooked those jobs to begin with.
“It seems like a matter of ethics at this point.”
There is nothing moral about destroying livehoods and families.
Good job playing the race card.
Is it moral to destroy a country and the lives of the people in it for perpetuity?
Oh, I thought it was about the poor workers “forced” to do “back-breaking” work “at slave wages” instead of those “much more highly compensated” jobs (which, as everyone knows, just fall from the heavens above). Now we see what it was really about. Who is playing the race card again?
“More than denying workers much needed jobs because they are from the wrong race, you mean?”
Those “jobs” are a form of organized exploitation of the American people. From another post of mine.
“Actually, a long list of produce crops already have been mechanized, but not in the USA. The USA was once a world leader in agricultural technology. Then we stopped enforcing the border… Now the U.S. a genuine laggard. Let me offer a few quotes that should help you understand this. From “The Worker Next Door” (New York Times)
“IT is often said that the American economy needs low-skilled foreign workers to do the jobs that American workers will not do. These foreign workers might be new immigrants, illegal aliens or, in the current debate, temporary or guest workers. But if low-skilled foreign workers were not here, would lettuce not be picked, groceries not bagged, hotel sheets not changed, and lawns not mowed? Would restaurants use disposable plates and utensils?”
“Employers facing higher labor costs for low-skilled workers would raise their prices, and to some extent they would change the way they operate their businesses. A farmer who grows winter iceberg lettuce in Yuma County, Ariz., was asked on the ABC program “Nightline” in April what he would do if it were more difficult to find the low-skilled hand harvesters who work on his farm, many of whom are undocumented workers. He replied that he would mechanize the harvest. Such technology exists, but it is not used because of the abundance of low-wage laborers. In their absence, mechanical harvesters — and the higher skilled (and higher wage) workers to operate them — would replace low-skilled, low-wage workers.”
Outside of the U.S. grapes are harvested with machines. In the U.S. its illegals. A typical quote follows.
“with an abundant and reasonably priced labor force at hand…why bother pushing for research into added mechanization.”
History provides another example. After WWII, the U.S. used Braceros (Mexican temporary labor) to harvest tomatoes in California For a number of reasons (abuses of workers), the Bracero program was shutdown. The usual special interests claimed that tomato production in California would end. Once the Braceros were gone, the growers immediately mechanized. The number of workers plunged, productivity soared as did production. Did I mention that wages went up… A lot. Quote from Philip Martin.
“The mechanization of California’s processing tomatoes illustrates the discontinuous adjustment process. In 1960, over 80 percent of the 45,000 peak harvest workers employed to pick the state’s 2.2 million ton processing tomato crop into 50 to 60 pound lugs were Braceros. A decade later, almost all processing tomatoes were harvested mechanically, and fewer than 5,000 local workers rode on the machines to ensure that only ripe…”
Philip Martin is America’s leading authority on agricultural labor. I quote
“Proponents of a new temporary worker program argue that increased immigration enforcement would lead to fewer illegal agricultural workers and, as a consequence, the American consumer would face a major increase in the cost of food. This is factually incorrect according to experts. Dr. Philip Martin, a leading academic authority on agricultural labor, notes that American consumers now spend more on alcoholic beverages on average than they spend on fresh fruits and vegetables.
An average household currently spends about $370 per year on fruits and vegetables. If curtailing illegal alien agricultural labor caused tighter labor conditions and a 40 percent increase in wages, the increased cost to the American family would be $9 a year, or about 2.4 cents per day. Yet for the farm laborer, the change would mean an increase in earnings from $8,800 to $12,350 for each 1,000 hours of work (25 weeks if the worker worked 40-hour weeks). That increase would move the worker from beneath the federal poverty line to above it.”
See also “Guestworker Programs: A Threat to American Agriculture” (CIS) “Illegal Immigration and the Colonization of the American Labor Market” (CIS)
It is perhaps true that “The technology is some cases doesn’t exist, and may be hard to develop”. However, the technology for switching crops always exists. For better or worse, you are defending the absolute worst cases of societal exploitation via Open Borders. Illegals in agricultural yield the fewest benefits to society as a whole and impose the highest costs on our nation. They are amount to undiluted rent-seeking (private profits, public costs). Basically, a system of organized (and for now legal) theft.
“Are there really a lot of Americans who want to clean chickens and pick strawberries? Is the some large number of natives clamoring for these jobs?”
After the Swift meat-packing raids, Americans (of all races) lined up for the newly available jobs. This was back when the economy was doing a lot better than it is now. Of course, some Americans get hysterical when anyone even suggests that American workers get a raise. Teddy Kennedy had a near-psychotic episode when Senator Dorgan (another Democrat) suggested that “chicken pluckers” might earn higher wages if America enforced its borders.
Robbing banks is a crime. However, doing the same thing with illegals is OK (at least so far). They don’t pay the costs of illegal / low skill immigration. It’s politely called “privatizing profits, socializing losses”. See “That glass of OJ is squeezing back – Huge hidden costs of cheap labor are borne by welfare agencies, schools, hospitals, police – you.” (Palm Beach Post). I quote
“But cheap labor also generates significant hidden costs, costs that one national labor expert says are so staggering that an 8-ounce glass of fresh orange juice that retails for 42 cents from the carton really costs Florida taxpayers a whole lot more”
“The migrants who pick Florida’s oranges are generally paid only 3.5 cents per half-gallon of fresh juice typically selling for $3.39 in supermarkets. Growers contend they can’t pay more because of narrow profit margins and competition from Brazil, where pickers, including children, are paid even less.”
Meanwhile, the rising invisible costs of cheap labor to harvest our crops are being shouldered by welfare programs, schools and hospitals required by law to treat anyone with a serious illness.
Many immigrants, legal and illegal, receive help from food stamps, infant and maternal nutrition programs, free and reduced-price school lunches, local health departments, churches and voluntary agencies. They increase demands on public safety programs and the criminal justice system. They require publicly paid translators and teachers of English-as-a-second-language.
Florida is among six states that receive the most immigrants, along with New York, Texas, New Jersey, Illinois and the No. 1 immigrant destination, California, where the National Academy of Sciences has estimated that immigrants’ use of social services and schools costs every California household $1,200 a year in additional taxes. The academy projected the total cost to U.S. taxpayers for services to immigrants at $15 billion to $20 billion a year, while their economic contribution is pegged at $10 billion.”
“Notes that American consumers now spend more on alcoholic beverages on average than they spend on fresh fruits and vegetables. –
We are not paying enough for vegatables to entice Americans to pick them, that is for sure.
Racists can’t have it both ways. Either the immigrants are explored and “forced” into slave-like work (as says Joe) or they are vampires sucking the vitality of this poor nation of ours as says you. Which is the right answer?
Man, you really don’t want “racist” to mean anything at all, do you
I want it to mean what it means, whether it pleases you or not.
Illegals can be exploited and be a burden at the same time. Employers can mistreat them and they can impose massive externalities at the same time. Consider some history. Antebellum slave owners didn’t win any prizes for kind treatment of their slaves. I don’t see too many folks (these days) trying to convince anyone, that slavery was such a great idea. Of course, it’s hardly a coincidence that cheap labor agricultural interests defended slavery back then and demand Open Borders now.
As for Forida orange growers, suffices to say that they have doing their best to destroy Brazilian access to the markets they covet.
“Growers contend they can’t pay more because of narrow profit margins and competition from Brazil, where pickers, including children, are paid even less.”
Pish posh! They resent our moral superiority because Brazilians work, our product is cheaper and much superior to the garbage they try to force on people who know better. They are greed monsters who should be put to rest, the sooner, the better.
Brazilian OJ is OK. So is Florida OJ. Of course, the price of Brazilian OJ is equal to the cost. Florida OJ costs vastly more then the price.
If Americans were not so greedy, they would simply import Brazil’s superior and cheaper product– there would be no other costs to pay beyond price. But Americans decided to hinder Brazilian exports of products Brazil enjoys obvious comparative advantage producing–sugar, oranges, biofuels–, so they must pay the associated social costs. Greed—not Mexicans-is destroying America.
>> lets try a 10-15 year experiment: severely limit immigration
Nah, I think we’ll do the opposite.
“It’s 2015: shouldn’t it be considered immoral to eat food harvested by back-breaking labor?”
More than denying workers much needed jobs because they are from the wrong race, you mean?
The graph is stretched. Please resize. Thanks.
Probably two factors:
1. An increasing share of the 15-64 group is late middle age women, whose children are grown up.
2. An increasing share of younger Japanese women are childless.
Japanese women are (presumably) more likely to work if not taking care of children.
Interesting, because I read the following in the Guardian yesterday:
“(…)At 64%, Japan’s female participation rate in the labour force, compared with 84% for men, is one of the lowest among the 34 leading economies that make up the Organisation for Economic Co-operation and Development.”
Yet another example of how you can’t trust the MSM.
I’d add to Scott Sumner’s points:
3. Japan has had a steadily growing number of part-timers from the 1980s — I think quite a bit more than the U.S. but not positive.
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