Japan Asks: Will Being Smaller Be Grim, or Great?

Imagine Japan 50 years from now with a third fewer citizens.

Or a child born today reaching age 100 in a country with only half its current inhabitants--the same number of people it had in 1928.

Would Japan be a gloomy place mired in a semi-permanent recession, where the voices of children were rarely heard? Where the pulsing streets of Tokyo’s Shibuya district, now so jammed that it’s difficult to open an umbrella, were filled not with outrageously dressed youth but with white-haired and relatively poor seniors?

Or would it be a paradise where robots did most of the menial jobs and well-paid, hyper-educated men and women as old as 85 spent short, stimulating work shifts jousting with competitors in a high-tech global economy? Where Tokyo residents, for the first time in a century, could enjoy unobstructed sunlight, reasonable land prices, clean air, no traffic jams, and room to sit down on a rush-hour subway and spread open a newspaper (or its digital equivalent)?

This is not a theoretical exercise. It’s a dead-earnest debate among intellectuals, environmentalists and government planners, prompted by the steep Japanese population decline projected to begin by 2007.

The debate has resonance worldwide. About 39 countries are expected to experience population declines over the next 50 years, even as the global population swells to about 9.3 billion, according to the United Nations Population Division.

The dimensions of Japan’s population decline are still uncertain. But even if its women begin having more babies, Japan will lose 14% of its population by 2050. If fertility does not recover, the population will halve in a century.

“We’ve never seen it,” said Joseph Chamie, director of the U.N. agency. “We do not have enough experience to say what happens when a population declines by 50%.”

Chamie says it would be a mistake to dismiss the projections as merely hypothetical. In 1953, the U.N. projected that world population in 2000 would be 6.2 billion. It is now estimated at 6.1 billion. Demographic projections are far more accurate than weather or economic forecasts, Chamie said.

The number of the world’s people over 80 will increase fivefold by 2050. China alone will have about 400 million people over 60. Japan will have nearly a million people over the age of 100.

Aging will have far-reaching effects on the leading industrialized nations, including potential pension shortfalls, labor shortages, falling savings rates and asset values, and eroding military capabilities, according to a study by the Center for Strategic and International Studies in Washington.

But there are key differences by country.

Europe tends toward high unemployment and early retirement and has already absorbed millions of immigrants and guest workers.

Japan’s economy is built around low unemployment, with hard-driving people who want to keep working for as long as they can--all the more so in the decade since the economy began to falter.

The only country whose population is even older than Japan’s is Italy. But while Italy has bolstered its graying population with young immigrants, xenophobic Japanese are already worried about an increase in illegal immigration, and there are widespread fears that labor shortages will necessitate guest workers who may never go home.

To keep its population stable, Japan would need 17 million immigrants by 2050, according to a U.N. study. That would mean 18% of the population would be immigrants--compared with just 1% now.

And while countries such as Italy have reduced public debt, Japan’s government debt is skyrocketing--just when medical and pension outlays for the elderly are also about to soar.

Japan’s finance minister told parliament in March that the nation’s finances were in danger of collapse, then retracted the remark. But private analysts, including Moody’s Investors Service, have been warning for some time that the coming demographic upheaval could have dire fiscal consequences.

They caution that a smaller work force shouldering higher taxes to support retirees will further depress consumption and growth. Reneging on pension commitments would undermine public confidence, but running up the red ink makes Japan more vulnerable to rising interest rates. Some warn of political tension between the generations, or even potential default.

“There is probably going to be a crisis of large proportions within a decade,” said Paul S. Hewitt, director of the CSIS global aging study. “You can see the outlines of it in a potential default. This will essentially wipe out their welfare state, and young people are not going to be taking old people in, because there won’t be enough young people.”

Hewitt believes that both Japan and Europe will find themselves in recession for much of the period between 2025 and 2050.

The Japanese government is deeply concerned about a population that is growing older and smaller. Evidence of its distress is a chart, published in the Ministry of Health and Welfare’s 1998 White Paper, showing that if the current birth rate were to continue for the next 1,400 years, Japanese would die out by the year 3500.

The fertility rate fell further in 1999, moving the projected extinction date forward 100 years.

However implausible its assumptions, the chart has been widely circulated here, adding to the general climate of pessimism.

Despite war and emigration, Japan’s population increased nearly fourfold from 33 million in 1868, the dawn of its period of rapid industrialization, to today’s 127 million. One major question being debated now is what a sustainable population for Japan would be.

Some scholars and environmentalists argue that a declining population is inevitable, and perhaps even desirable.

Paul Ehrlich, a Stanford University biologist and author of the seminal 1968 book, “The Population Bomb,” argues that Japan should let its population decrease quickly now, while it has the economic vigor to manage the transition.

Shinji Fukukawa, head of the Dentsu Institute for Human Studies think tank, says the issue is not the size of the population so much as the ratio of elderly to young. “There is now much discussion that 100 million [population] is too much, so maybe 50 million is better,” Fukukawa said. “But the problem is in the transition process.”

Ehrlich argues that the optimum world population is one-quarter of its current level. He says Japan in particular, with its dearth of arable land, dependence on imported food and energy, and great vulnerability to climate change from global warming, should adopt that goal.

“It would be a great country to live in with 30 million people,” Ehrlich said.

Ehrlich’s ideas are still outside the mainstream in Japan, where economic growth continues to have priority over environmental concerns. But many Japanese liberals, environmentalists and feminists argue that their country’s fixation on economic growth has been misguided. Overcrowding, high land prices, the rigid employment system, inflexible gender roles and quality-of-life issues should have equal attention, they say.

“Why must we automatically have a recession when the population declines?” asks Keiko Higuchi, a specialist in gender studies and aging society at Tokyo Kasei University. “Whenever I go places that are less densely populated, I think life there is so good. I believe our current population is too high.”

Sophia University economist Naohiro Yashiro says that declining populations and sustained economic growth can coexist if Japan improves productivity, reforms its labor system and blunts the sharp economic penalties for women caught between work and child-rearing.

Others argue that the common interpretation of many of the demographic statistics is too gloomy.

For example, Japan’s life expectancy--already the highest in the world at 81.5 years--is expected to increase to 88 years by 2050. That’s a pension planner’s nightmare, but a public health triumph.

Nor must an aging work force be inherently inferior, some say. Japan has a history of stunning efficiency improvements, Fukukawa notes. He says the demographic crunch could spur innovation, productivity gains and better use of capital.

And while Asian neighbors worry about pacifist Japan rearming, its self-defense forces will face serious manpower shortages. Would aging Japanese parents risk sending their scarce children off for dangerous duty as peacekeepers, let alone combatants?

The emerging consensus is that even the powerful, interventionist Japanese government can’t--and shouldn’t--do much to influence private reproductive decisions. Instead, analysts say the government should focus on planning for the inevitable.

Said sociologist Takahiko Furuta, an expert on Japan’s aging society: “We must accept the reality of the inevitable birth dearth and decline in population and adjust all of our policies.”

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No Longer a Population Superpower

Japan is projected to rank 16th in the world in population size in 2050. Economists and environmentalists argue about whether population decline inevitably depresses economic growth.

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Source: “World Population Prospects, the 2000 Revision,” United Nations Population Division