Global Workforce Demographics – Part 2 of 4: Japan’s Workforce

This is Part Two of a four part blog on Global Workforce Demographics.  Here is the link to Part One

 Japan’s Workforce Demographics

Japan is a country with 66 million workers, yet 1 in 4 is 55 and older.  In the US that figure is 1 in 6.  Out of the 13 countries studied, Japan has the highest percentage of aging workers.  Like many other developed countries, trends in life expectancies and birth rates have taken their toll on the Japanese workforce.  Because of the aging population and the reduced number of births, Japan is very exposed to Age and Retirement risks.

Age and Retirement risks each reflect an aging workforce but generate different outcomes.  Age risk is the potential productivity loss associated with an older worker while Retirement risk is the potential loss of an employee to retirement. 

For Age risk to become a “real” issue for corporate executives depends on a combination of the job and worker.  For certain manual occupations, an aging worker will become less productive.  Examples are agriculture and construction workers.  Yet, the same worker in a different job, say inside-sales could display an increase in productivity.  The point is that while Age risk is less certain and in some instances, difficult to measure, its threat at a macro-economic level is real.

Three reasons support an assessment that Japan has higher levels of Age and Retirement risks:

  • 26% of its workforce is 55 years and older.
  • In the next five years, it is probable that the percent of 55 and older workers will grow to between 30% to 35% of Japan’s workforce.
  • 30% of its economy, as measured by GDP, comes from physical occupations in agriculture, fishing, mining, manufacturing and construction.  These industries, by their nature have high exposures to Age risks.  By comparison, the US economy produces 22% of its GDP from these same industries.

Since 2002, Japan has enjoyed  a return to economic growth that it had not experienced since the late 80’s, yet, unmitigated Age and Retirement risks loom which could contribute to an end to their economic recovery.

Here is the link to Part 3

Parts Three and Four of this Blog are in Process and will be posted soon.   

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