Written by Vincent Mathew
Through 1950 to 2021 the global birth rate experienced a fall from 5 births per woman to 2.3 and conversations regarding the future of the global fertility decline have gained stark prevalence in response (UNPF, 2023). Developed nations have seen the most drastic decline estimates with Europe projected to endure a 7 percent decrease in population between 2022 and 2050 (UNPF, 2023). Japan, however, has set itself apart with its nearly decade-long struggle against declining birth rates reaching its peak in late 2022, when the nation’s fertility rate dropped to a record low of 1.26 births per woman (Piser, 2023). In addition, during 2023, the nation saw the lowest number of babies born in a single year, 758,631, since 1899 (The Economic Times, 2024). Japan’s alarming situation manifests the predicament other developed nations face in light of the global fertility crisis. Like the rest of the world, Japan’s fertility crisis predominantly stems from the increased freedom young people, especially women, are now privy to in modern societies. The Japanese government, known for its conservative legislation, has struggled to adapt with modern autonomy, resulting in citizens claiming the recent policy work of current prime minister, Fumio Kishida, to be ineffective, empty subsidies. Consequently, Japan, now mired by wage stagnation coupled with increasing childcare costs and a rapidly aging labor force, is forced to reckon with gender disparities perpetuated by strenuous workplace culture and traditionalist values that have led to their declining birth rate, presenting an pressing economic issue for both the nation and abroad.
In Japan, the chief socio-economic issue facing new or prospective families as a result of the birth rate decline is the rising childcare costs in a largely stagnant economy. On average, a Japanese citizen in their twenties only makes about $17,000 to $20,000 dollars per year and this income estimate has stagnated over the last decade while cost of living has skyrocketed (Piser, 2023). In order to solve this cost-of-living issue, Kishida’s cabinet has enacted an economic stimulus package that contains measures aimed at extending gasoline and utilities subsidies, however, critics argue that the measures only act as a short-term solution to the greater influence of decades-long wage stagnation. The plateauing wage rates are coupled with the increase in childcare costs that are especially prevalent in their current education system: In Japan, public school, although cheaper than private schooling, still costs tuition at all levels of education. In 2021, the gross annual childcare costs for two kids made up nearly half the annual earnings of an average couple working full-time jobs- in the United States, the same proportion is about twenty percent lower (Piser, 2023). The results of the birth decline have been punishing to Japan’s economy, but the economic effect that’s gained the greatest attention lies in its aging population.
The nation’s aging population has become a persistent issue that threatens to perpetually stunt their economy. Japan is currently the nation with the highest old-age dependency ratio, -a statistic that relates the number of retired people to the working age population- with a proportion of 48.6 seniors for every 100 working adults. (Keulen, 2024) Additionally, this metric is projected to increase 79/100 by 2050 (Keulen, 2024). Among economists, a diminishing population is often linked to a weakening economic growth. The economic growth slows when a population ages due to pressure on the national social security system. There is less income tax to collect from individuals as the workforce gets smaller and as the need for elderly care, health care, pensions and health care workers increases, so does the amount of necessary public funding. Furthermore, since the aging labor force has been an issue in Japan for years, there have been multiple policy attempts to solve the problem, including an initiative to increase the proportion of women in the workforce.
In 2013, former Prime Minister Shinzo Abe enacted a controversial policy named “Womenomics”, tasked with increasing women’s representation in the workforce. The policy, in a way, functioned, showing significant increases in women’s employment compared to twenty years ago, however, in 2022, over fifty percent of those jobs were “irregular, lower paid and lacking employment benefits and protections” (Beattie, 2022). Womenomics, as a whole, did very little to alleviate the societal unwillingness to promote women into higher earning and financially stable jobs. The government’s refusal to address the root of the issue culminated in a report made by the World Economic Forum that ranked Japan last in gender wage disparity below all other G-7 nations (Al Jazeera, 2023). This does not come as a surprise, with Japanese women in 2020 making around seventy-five percent as much as men for full-time work (Beattie, 2022). Currently, Kishida’s government is making promises to diminish the gender-pay-gap; it is yet to be seen whether their measures will amount to consequential change, especially in the face of Japan’s ongoing and prominent battle against toxic work culture.
Companies in Japan have been criticized for years after many reports demonstrating the rampant overwork and strenuous job conditions (Hunt, 2021). The work-life balance necessary for most couples to even think about having children is simply not an option under Japan’s predominant corporate culture. Today, the problem of career pressure has only been exacerbated by the influx of women in the workforce and its effect on Japan’s stringent adherence to traditional gender roles. Japanese women are trapped by societal expectations to withstand the brunt of child-rearing while the country’s high cost-of-living requires them to maintain a job. When placed in this situation, women with children are often forced to take parental leave, (although quite generous in Japan) but some are left with a new fear of divorce, which, if occurred, could leave them in financial ruin (Piser, 2023). As a result, many young Japanese women are making a choice between financial independence and having children and, of course, are choosing the former. While Japan’s traditionalist government continues to grapple with progressive views on the domestic and public roles women ought or ought not to have, their economy suffers the backlash.
Japan’s struggle with declining birth rates reflects an interplay of socio-economic and cultural factors. Prime Minister Kishida’s attempts to address the issue have been met with skepticism, as they have offered only short-term solutions to deeply rooted issues. The socio-economic challenges, marked by stagnant wages and rising childcare costs, have created a daunting financial burden for young couples contemplating starting a family. An aging labor force perpetuates the stagnant economic growth while adding duress on the social security system. Simultaneously, cultural factors, such as career pressures and traditional gender roles, further complicate the dilemma, with women caught between societal expectations and the practicalities of maintaining financial independence. Despite initiatives like “Womenomics,” the persistent gender wage disparity underscores the government’s failure to address the root causes of the issue. As Japan stands at a crossroads, the nation faces an uncertain future. It remains to be seen whether the government’s promises to tackle these issues will lead to meaningful and lasting change. As the demographic shift persists, Japan will continue to grapple with the ramifications of its declining birth rates, navigating an intricate path toward a more sustainable and balanced future- and hopefully the world will follow.
References
Al Jazeera. (2023, March 8). Japan’s Kishida pledges to ‘work harder’ to fix gender pay gap. https://www.aljazeera.com/economy/2023/3/8/japans-kishida-pledges-to-work-harder-to-fix-gender-pay-gap#:~:text=Japan%20has%20the%20widest%20gap,efforts%20to%20tackle%20gender%20inequality.
Beattie, E. (2022, November 17). Opportunities for women return to Japan’s job market, but inequalities persist. The Japan Times. https://www.japantimes.co.jp/news/2022/11/17/business/women-workforce-post-pandemic/
Hunt, E. (2021, February 2). Japan’s karoshi culture was a warning. We didn’t listen. Wired. https://www.wired.co.uk/article/karoshi-japan-overwork-culture
Keulen, R. (2023, February 5). Understanding Japan’s Demographic ‘Crisis’: An Alternative Perspective on Population Decline. Earth.Org. https://earth.org/understanding-japans-demographic-crisis-an-alternative-perspective-on-population-decline/
Piser, K. (2023, October 23). Cash Can’t Fix Japan’s Fertility Crisis. Foreign Policy. https://foreignpolicy.com/2023/10/23/japan-kishida-economy-speech-women-birth-fertility-rate-population-demographics/
The Economic Times. (2024, February 29). Why is Japan grappling with record-low birth rates? Here’s what the govt said. https://economictimes.indiatimes.com/news/international/us/why-is-japan-grappling-with-record-low-birth-rates-heres-what-the-govt-said/articleshow/108116336.cms
United Nations Population Fund (UNPF). (2023). 8 Billion Lives, Infinite Possibilities: The Case of Rights and Choices. https://www.unfpa.org/sites/default/files/swop23/SWOP2023-ENGLISH-230329-web.pf
Yamaguchi, M. (2023, June 2). Japan birth rate hits record low amid concerns over shrinking and aging population. Associated Press. https://apnews.com/article/japan-birth-rate-record-low-population-aging-ade0c8a5bb52442f4365db1597530ee4