Japan now has over 70,000 people who are more than 100 years old.
That stunning fact comes from Extreme Economies, an interesting new book by Richard Davies. Davies looks at extreme economies around the world such as extreme failure (Darien, Kinshasa, Glasgow), extreme resilience (Aceh, Angola Prison, LA), extreme inequality (Santiago) and in the case of Japan (Akita), extreme aging.
Japan’s aging is unprecedented and is having effects throughout the economy and society:
In 1975 social security and healthcare spending commanded 22 percent of the country’s tax revenues; by 2017 the figure, driven up by elderly care and pensions, had risen to 55 percent. By the early 2020s the figure is set to hit 60 percent. To look at it in another way, every other public service in Japan — education, transport, infrastructure, defense, the environment, the arts–could rely on almost 80 percent of tax revenue in 1975, but the increase in elderly-related spending means that only 40 percent is left for other national public expenditures. In budgetary terms, ageing is eating Japan.
As a country, Japan is aging not just because it’s people are getting older but because it’s birth rate is well below replacement. This year there will be fewer than 900,000 births in all of Japan–a number not seen since 1874 when Japan’s total population was much smaller. Overall, Japan’s population is declining.
Population decline may have some good effects but the combination of fewer young people and more elderly people is straining Japanese culture along with its finances. The young naturally resent the increasing burden put on them for supporting the elderly. As with all Ponzi schemes, pay-as-you-go social security schemes come under stress when the population is no longer growing.
…over the next 30 years or so, many countries’ pension systems will require young workers to fund a system that everyone knows will be far less generous by 2040. It is hardly a way to generate confidence in public policy.
And those 70,000 centenarians? Almost 90 percent are women so an aging society is a gender unbalanced society meaning old people lose caregivers or at least someone to share a household with.
Davies is interested in Japan as an example of where many countries are going,
Southern Europe, in particular, is following fast with Italy, Spain and Portugal already experiencing population decline. Germany will start to shrink in 2022, Korea in the early 2030s. Akita, Japan’s cutting edge of ageing economics,…offers a valuable window on the future.