COMMENTARY | According to CNN, the decline of Japan as an export powerhouse has begun as it has its first year without a trade surplus in over three decades. Combined with its declining exports is the fact that Japan, known for having the world’s largest populations of elderly citizens, will shrink drastically over the next 50 years.
The land of the Rising Sun has been eclipsed by lower-cost exports from China and other Asian nations, such as Indonesia, South Korea, and Malaysia. Its aging population could hardly be expected to match the productivity of younger, hungrier nations with millions more workers in their prime. Japan’s decline, in other words, is not at all surprising. In a game of numbers, Japan simply has too many retirees and not enough productive workers. After decades of wealth its productive workers expect salaries and benefits not offered in China, Indonesia, or Malaysia, thereby reducing the profitability of its companies.
What ramifications does the decline of Japan hold for other nations, including our own?
One major implication is that the concept of retirement will have to be re-evaluated, both by individuals and by policymakers. Unless Japan begins expecting healthy citizens to continue working past age 65, it will not have enough productive workers to support those who are too old to work. In the United States and western Europe, the situation is similar: Virtually all industrialized nations are approaching a crisis point where there will be too few workers supporting too many retirees.
And, with our ever-increasing lifespans, perhaps now is the time to question why the age-65 benchmark, created all the way back in the 1930s when Social Security was created by president Franklin D. Roosevelt, is still the standard for retirement and being considered “old.” Why not 68, or 70, or even 72?
Linked to the need to re-define benchmarks for retirement age and “old age” is the need to focus more on public health. What can wealthy nations do to keep their productive workers in shape to work past age 65, decreasing the chances that we will be swiftly outworked by the millions of young workers from Asia? Perhaps the news that Japan is on the decline due to its aging population will make governments in North America and Europe really think about trying to roll back the obesity epidemic.