Checkpoint Asia

Japan Now Losing Nearly Half a Million People a Year. Record Immigration Barely Making a Dent

Decline accelerates as their late-1940s baby boomers start dying off

A preview of what awaits many other countries

The pace of population decline in Japan is accelerating, with the country set to lose the equivalent of a midsized city every year for the foreseeable future.

The native populace fell by more than 430,000 people last year [through October], according to new figures published by the Ministry of Internal Affairs.

That was partially offset by a record net inflow of more than 161,000 migrants but the overall pace of decline still hit a new high of minus 0.21 per cent. That has left the population at 126.4m, down from a peak of 128m in 2010.

Japan’s natural population decline is among the fastest in the world although some European countries with high emigration — such as Romania and Bulgaria — are shrinking even faster.

The faster pace of population decline will heighten Japan’s dilemma about whether to allow more permanent immigration, as well as creating tough conditions for companies that are reliant on domestic consumer spending.

“The reason Japan’s population is now falling so fast is not the low birth rate but rather an increase in the number of deaths,” said Akihiko Matsutani, professor emeritus in applied economics at the National Graduate Institute for Policy Studies.

Japan had a baby boom before the second world war because of military pressure to increase the birth rate, he added. “Those people are now reaching the age of passing away,” said Prof Matsutani.

Population decline is hitting especially hard in rural and regional Japan, due to a high pace of migration to Japan’s cities, as well as rapid ageing.

In northern prefectures such as Aomori and Akita the population is falling by more than 1 per cent a year. In some villages almost nobody is under the age of 70 and so-called “shutter streets” of shops never open.

The pace of deaths is set to increase steadily until it peaks in around 2030, said Prof Matsutani, resulting in an acceleration of the decline in population. After that the population will keep falling because of the low birth rate, but the pace will cease to accelerate.

The National Institute of Population and Social Security Research projects that by the middle of the century, Japan will be losing about 900,000 people a year, roughly equivalent to a city the size of Glasgow in Scotland or Austin in Texas.

Age pyramid in 2015

There were 944,146 births in the year to October 2018 compared with 1,368,632 deaths. [difference of 424,486] In 2011, there were 1,073,663 births and 1,256,387 deaths.

Long-term projections suggest Japan’s population will fall to just 50m in a hundred years, the same as it was a century ago, said Rissho University president Hiroshi Yoshikawa.

“One big problem is that with population decline comes population ageing,” said Prof Yoshikawa, who added that this will put a severe burden on public finances and local communities as they struggle to care for the elderly. But, he said, Japan could still hope for economic growth on a per capita basis.

Japan’s foreign resident population reached a new high of 2.2m in 2018. A strong economy and immigration reforms by prime minister Shinzo Abe have boosted inflows of guest workers.

However there is still a fraught debate about whether they will become long-run migrants, settling and having children in Japan, which would help to stabilise the population in the long run.

Most guest workers are on time-limited visas that do not allow family members to accompany them. The government has tentatively begun to open paths to permanent residence for high-skilled workers.

“The rise in foreign workers is moderating the decline in the population,” said Prof Matsutani. But he warned that Japan’s guest worker strategy is perpetuating an economic model based on cheap labour and still leaves an unbalanced population structure.

Prof Yoshikawa said that it made sense to move towards higher immigration. “The best first step would be to accept more of the Asian students who are already studying in Japan,” he said.

Source: Financial Times