Japan’s Population Implosion Is an Economic Time Bomb
Peter St. Onge /
Editor’s note: This is a lightly edited transcript of the accompanying video from professor Peter St. Onge.
Japan is running out of people. It will get worse—and we’re next.
Last week, Japan’s government announced the country lost 861,000 people last year as the country’s fertility rate—the average number of babies a woman is expected to have in her lifetime—fell to a record low of 1.2.
For perspective, if you start with 100 million people and have 1.2 babies each, after three generations, you’re down to just 20 million people.
On a related note, over 65s now account for 30% of Japan’s population, while a new study finds there are 9 million vacant houses in Japan—about 1 in 6 homes in Japan is vacant and falling down.
What’s driving it? As always, government.
Namely, we’re running out of kids because slow growth and inflation force two-income families, while mandatory government pensions remove the main historical incentive to have kids—to support you in old age.
If you’re struggling to make ends meet as it is, and if you don’t need kids when you’re old, you’ll delay or skip them altogether.
And that’s exactly what happened in Japan: In the 1950s, Japanese women had on average three and a half children. In 1961, universal pensions were introduced, and the birthrate—and marriage rate—started dropping. Then came the 1970s inflation, which took the percent of young Japanese women working from 46% in 1969 to 83%.
The finishing blow is the lost-decades stagnation, which forced even married women to work to make ends meet. The percentage of married Japanese women age 25 to 29—prime childbearing ages—who were working went from 50% in 2006 to 80% today.
In fact, today in Japan there are more young women working than young men working.
The government’s response has been to rearrange the deck chairs on the Titanic: One-time cash bounties, or the Left’s favorite, subsidized child care. Or, of course, importing new people.
Sadly, none works. Immigrants bring their own labor shortage with them: They go out to eat, get their teeth cleaned, they stand in line at the doctor. Otherwise, we could just annex Canada and have millions of spare workers.
Meanwhile, many European countries have tried both cash for babies and free child care, and it doesn’t work. Scandinavia, for example, has universal child care and the result is fertility rates of
1.5 in Sweden and Denmark, 1.4 in Norway, and 1.3 in Finland.
So, no, it’s not a lack of government spending; it’s the government spending itself that drives inflation and stagnant incomes to where there’s no financial cushion to start a family.
Meanwhile, government pensions reward doing the bare minimum by equalizing payments and disincentivizing hard work.
I’d guess with an assist from public education that, at least in the West, turns child against parent, leaving mom and dad wondering why they sacrificed so hard to raise people who despise them.
So what’s next? Unfortunately, there’s no public policy cavalry coming. While voters might vaguely wish there were more babies in the world, that’s up against trillions of crony dollars driving the inflation-stagnation juggernaut.
Fortunately, on a personal level, you don’t need a bureaucrat’s permission. In a dynamic economy, research says men actually make more once you have kids, because you work harder. This is called the “fatherhood wage premium,” and studies find it essentially covers the extra costs, research says men actually make more once you have kids, because you work harder. This is called the “fatherhood wage premium,” and studies find it essentially covers the extra costs.
So, while the developed world turns out the lights, it’s your kids who will inherit the earth.
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