It’s hard enough to create GDP growth when you have a declining population, since you need to exceed population shrinkage with higher productivity.
But it’s near impossible to do if your population decline is accelerating.
Japan’s population shrunk by the most ever, 45,914 people, in the year ended March 2009 based on latest data. Japan’s demographic death is getting worse.
It’s a bad time to be young in Japan. Not only are there fewer of you, but your parents’ generation is putting you further into debt with cushy benefits. Meanwhile, you fight for fewer traditional jobs. 1/3 of Japan’s workforce is now made up of temporary workers since companies are dropping the country’s old unsustainable cradle-to-grave employment model.
While government makes half-hearted attempts to solve the problem by stimulating the country’s birthrate, (though expelling immigrants at the same time), tradition, corporate culture, and other factors block efforts for improvement. It also doesn’t help that the largest voting demographic doesn’t have much to lose on a 50-year timeframe.
The most recent data shows that things are getting worse, not better, and if this continues we would expect GDP declines to become a permanent feature of the country. Perhaps now we understand corporate Japan’s fascination for robots.
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