Japanese voters want a plan to handle a declining population

The city of Fukuoka, the biggest on the island of Kyushu, is buzzing. Hip young things at Fukuoka Growth Next, a city-run corporate incubator, bash away on their laptops. As the sun sets they gather to sup in the chi-chi bars beside the river. Fukuoka is Japan’s fastest-growing metropolis, including for 15-29-year-olds. It would be idyllic, but for the fact that these are the people who wonder how they will bear the burden of Japan’s declining and greying population. The current election campaign, alas, is doing little to reassure them.

 

Demographers reckon Kyushu, the southernmost of Japan’s four main islands, will lose 19% of its people by 2040. Over the same period the share of Japan’s population over the age of 65 will rise to 35%, compared with 28% today. The median age will rise by almost seven years, to 54. Although Fukuoka is still growing, thanks to immigration from smaller towns and villages, Kitakyushu, the island’s second city, saw its population shrink by 1.5% (15,000 people) in the five years to 2015. Some villages are so depopulated that locals have decorated them with mannequins to provide a semblance of activity.

Supporting the old already puts a huge burden on the young. Spending on medical care, pensions and nursing accounts for a third of the national budget. The days when graduates could expect a job for life are over. That may make the economy more flexible, but worries younger voters. “I don’t know if I will be able to afford children,” says a woman in her 30s.

The outgoing government of Shinzo Abe, from the long-ruling Liberal Democratic Party (LDP), has made some moves to spread the burden more equitably. It is encouraging elderly people to keep working and is debating raising the retirement age for civil servants by five years, to 65. This year it increased the amount those over 70 must pay for their medical care before the government will chip in. It has opened more public nurseries to clear long waiting lists for child care.

Mr Abe’s ostensible reason for calling the election was another sop to the young. He wants voters’ support for a plan to spend some of the revenue from a scheduled rise in the consumption tax to reduce the cost of nurseries and universities, instead of paying down the national debt. But the debt, now at 250% of GDP, is itself a burden that will weigh on young people.

“The harm may be almost invisible now, but there are enormous accumulative effects for the future generations,” says Isao Kubota, the chairman of Nishi-Nippon Financial Holdings. He says the government needs to look more closely at expenditure. Even some pensioners agree. “It’s so hard to survive on our pension that sometimes we think the idea is for us not to survive,” says Shigenobu Mori, who says he receives around ¥100,000 ($888) a month, which is less than a third of the median household income. “But we have to or it will be even more of a struggle for our children.”

Around Kyushu, an LDP stronghold, voters have little faith that the party will tackle the costs of Japan’s changing demography. Many suspect the government will put off the tax rise for fear of derailing the economy’s tentative recovery, as happened in 2014. But voters do not have much trust in the newly configured opposition parties, which are still in flux and have yet to come up with clear manifestos. The most formidable opposition force, the Party of Hope, claims to be more concerned than the LDP about fiscal discipline, yet wants to postpone the tax rise.


Some reckon the solution does not lie in national policy. Soichiro Takashima, the mayor of Fukuoka, says cities need to create their own opportunities “from the grassroots up” by fostering small businesses. Whoever wins the election could draw at least one lesson from Fukuoka: the city, which is closer to Shanghai and Seoul than to Tokyo (see map), is more open to immigrants than the rest of Japan.

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- https://www.economist.com

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