If you want a peek at the future, try looking at Japan. You may not like what you see.
If you want a peek at the future, try looking at Japan. It’s a sobering exercise. Here’s how economist Timothy Taylor, managing editor of the Journal of Economic Perspectives, describes the country’s outlook:
“[Japan] is facing a situation of a declining population and workforce, and the share of the population that is elderly is on the rise. [This is] driving up government spending on pensions and health care, and together with attempts to stimulate its economy through government spending (much of it on infrastructure), Japan has run up an enormous government debt.”
To put it bluntly (as I have argued before): Japan is slowly going out of business; its population is shrinking and it resists immigration. This cannot continue indefinitely.
What is significant about Japan’s situation is that it’s shared, to a greater or lesser extent, by most of the world’s advanced countries. Birthrates are depressed; economies are expanding slowly, if at all; and debt burdens are high and often growing. AD Three voices on Japan's new immigration push Japan's workforce is shrinking, leading the government to introduce legislation that would shake up the country's views on immigration. (Simon Denyer, Jason Aldag/The Washington Post)
You may recall, or not, that in the late 1980s, Japan was widely expected to overtake the United States as the world’s leading economy. Japanese firms also increasingly dominated old-line manufacturing industries (steel, autos) as well as new high-technologies (electronics).
What a difference a few decades make! Japan’s economy, though huge, remains the world’s third largest, behind the United States and China. But it is no longer the envy of the world. Many practices admired in the 1980s are less so today.
The biggest problem is the nation’s aging. A new report on Japan from the Organization for Economic Cooperation and Development (OECD) — quoted by Taylor and posted on his useful blog, the Conversable Economist — reports this astounding fact: Half of Japanese children born in 2007 are expected to live to 107.