Japan, Short on Babies, Reaches a Worrisome Milestone

This post was originally published on this site

https://static01.nyt.com/images/2017/06/03/business/03Japanbabies/03Japanbabies-moth.jpg

TOKYO — Since Japan began counting its newborns more than a century ago, more than a million infants have been added to its population each year.

No longer, in the latest discomforting milestone for a country facing a steep population decline. Last year, the number of births in Japan dropped below one million for the first time, the Ministry of Health, Labor and Welfare said on Friday.

The shrinking of the country’s population — deaths have outpaced births for several years — is already affecting the economy in areas including the job and housing markets, consumer spending and long-term investment plans at businesses.

For now, the Japanese economy is growing despite a dwindling number of workers and consumers. Output rose for a fifth straight quarter at the start of this year, and the stock market reached its highest level in a year and a half on Friday, with the Nikkei-225 index exceeding the symbolic 20,000 mark. Growing global demand for Japanese products is one reason.

But the real decline has barely begun.

After Japan’s population hit a peak of 128 million at the start of the current decade, it shrank by close to a million in the five years through 2015, according to census data. Demographers expect it to plunge by a third by 2060, to as few as 80 million people — a net loss of a million a year, on average.

About 40 percent fewer children were born in Japan last year than in 1949, at the peak of the country’s post-World War II baby boom. The number had not fallen below one million since 1899, when comprehensive record-keeping began. At that time, Japan’s population was smaller than it is today, but individual families tended to have more children.

For some, the latest numbers offer advantages. Unemployment was 2.8 percent in April, the lowest in decades, and construction in Japan’s famously crowded cities has slowed.

Yet the prevailing view of Japan’s demographic future is grim.

Fewer young people means fewer workers to support a growing cohort of retirees, adding strains to pension and health care systems. Already, in some rural areas, a majority of residents are over 65, and empty houses are a spreading blight.

In a speech to business leaders this week, Prime Minister Shinzo Abe called for a “national movement” to address Japan’s demographic challenges. The government has taken steps to keep older workers in their jobs longer, and to encourage companies to invest in automation.

“The labor shortage is getting serious,” he said. “To overcome it, we need to improve productivity.”

Japanese governments have been promising to tackle the population decline for decades, but with little apparent effect.

Official efforts to encourage women to have more children have had only modest results, and there is little public support for large-scale immigration — something that has helped to stabilize populations in other wealthy countries with low birthrates.

Birthrates have, in fact, risen slightly compared with a decade ago. But with women marrying later — in part, specialists say, to avoid pressure to give up their careers — prospects for a more decisive turnaround look remote.

And as the population decline accelerates, economic growth will be harder to pull off. How much the population size will fall is difficult to predict, but the basic trajectory is clear, demographers say.

Japan’s birthrate has long been lower than what demographers call the “replacement rate.”

As a result, rates have been low long enough that each new generation of potential mothers is also smaller, compounding the downward pull.

Individual Japanese will not necessarily be poorer just because the economy is smaller. But some economists argue that traditional definitions of growth and prosperity will need to be rethought.

“A lot of the things we’re used to in Japan are really products of an era of population growth, like single-breadwinner families and mandatory retirement ages,” said Takaaki Tahara, research director at the Japan Institute for Labor Policy and Training. “The mind-set will have to change.”