Japan is the country in the world with the most rapidly aging society. The population figures are estimated to fall from 127 million today to 95 million in 2050. And the proportion of older people in society will increase accordingly. Experts fear the consequences: Who will make up the workforce? Who will pay the pensions of the retired generation? Even today some retired people are finding it hard to survive on their state pensions -- how will things be in the future?
By 2014 over 25 percent of Japan's population will be over 65
"I work in order to remain physically healthy from 7.30 in the morning to 10.30. Three hours. Today is garbage day. That’s why I came so early. I’m 71 years old.“
Such statements can often be heard from people who are about 70. Often people of this age who are fit enough continue to work despite the official retirement age of 63. Last year, the government raised the retirement age to 63. In 2010, it will rise again to 64 and in 2013 it will be 65.
This is the first governmental measure to try to temper the consequences of Japan’s rapidly aging society. Atsushi Seike, a professor of labour economics at Keio University in Tokyo, estimates that within seven years, in the “year 2014 the proportion of older population will reach 25 percent -- a quarter of the total population will be older people aged 65 years and over.”
“In order to cope with this tremendous aging population it is important to promote the employment of older people. If older people have a will and the ability to continue working beyond the current retirement age they will support the aging society by themselves instead of being supported by a younger generation."
Growing gap between rich and poor
Professor Seike’s work has focussed intensively on the generation which is now entering retirement. Seven million people will soon be getting a pension from their companies and the state. But half of Japan’s retired generation has to survive on the state pension alone -- an average of 2.7 million yen, or 15,000 euros a year.
No wonder then that several older people continue to work, says Keiji Bannai from the Japanese Ministry of Labour: “The figures such as the gross domestic product show that Japan is a rich country. But not everybody shares these riches. The older the people get the bigger the differences between the poor and the rich become, between those people who were able to save and those who needed the money to live. That means that there are poor people who have to work their whole life regardless of their age.”
According to the official statistics, on average Japanese men retire at 69 whereas women retire at 66.
Transferring skills and knowledge
But the sinking birth rate and dwindling contributions to the social security system are not the only reason the government has decided to focus on the society’s aging population explained Atsushi Seike who said that "small and medium-sized companies are really willing to recruit or employ older people.”
“Also in large corporations the Japanese baby-boomers are now going to retire and they have accumulated good skills and knowledge within them so the employers need to transfer these skills and knowledge,” to the younger generation.
But the problem is that Japanese employees are generally paid according to age -- the older they get the higher their wages.
This is a problem for many companies, which can’t afford to pay the high wages. That’s why the government and experts are promoting a move to pay people according to their achievements.
Working for survival or well-being?
“If one is over 65,different points have to be taken into consideration,” explains Bannai from the Ministry of Labour, “physical force, health and vitality for instance. That’s why we suggest that people over 65 don’t necessarily work full-time but instead work part-time“.
For many Japanese baby-boomers working means that they are needed by society, as well as ensuring a higher quality of life.
This is why more and more retired people are taking on voluntary work. But it is also a sad reality that many in one of the world’s biggest economies have to work for survival. Observers fear it’s going to get worse for Japan’s pensioners.