What is meant by the “demographic time bomb” Show, for one developed country of your choice, how individuals, firms, government and society can best adjust to meet the challenges of this social phenomenon.

Nowadays several countries of the world, especially developed ones are facing with the critical worldwide phenomenon so-called “demographic time bomb” which characterized by an increasing number of older people dependent on pension schemes and immigrants have higher birth rates than the native-born majority population which is very rapidly aging and having less children in these countries. To cut a long story short, demographic time bomb - including population ageing - is basically determined by three factors:

- The fertility or birth rate;

- The mortality or death rate;

- Net immigration.

Already today in the industrially developed countries a natural (excluding immigration) increment of the population either it is equal to zero or it is negative. This phenomenon explains the theory of demographic transition, according to humanity is passing from high birth rate and death rate to low birth rate and life expectancy increase. At the present this process is already in full swing in the developed countries all over the world. According the last report about population of United Nations (The UN) in 2008, by 2050 life expectancy of every fifth inhabitant in the planet will be older than 60 years, and number of those to whom at 85, will increase in 6 times. In most rapidly growing old countries (Japan, Germany and Italy) will be reached or exceeded 40 percent level of the elderly population at large. The fact that the demographic transition is at different stages across countries, particularly in industrialized countries relative to developing countries, implies that the global nature of demographic change cannot be ignored.

JAPAN IS

THE GROWING OLD NATION

The demographic time bomb is already ticking in Japan being the leader in this potential crisis.  The first census, carried out in Japan in 1920, showed that the people older than 65 years in the country were counted only 5.3 percent of population at large. Far-Eastern Empire differed a little then from other areas of Asia - as in it many children were born, and the high death rate did not allow the aged people “to be accumulated”. Such kind of contribution of old people in the Japanese society remained till 1955 then it began to grow promptly - the country quickly grew rich, the standard of living raised, quality of health services improved. As a result in 1970, on United Nations classification, Japan has been proclaimed by "the growing old nation” - the number of people older than 65 years has passed for 7 percent, in 1988 this indicator has reached 11.2 percent, and by the end of 1990th years - has exceeded 15 percent of the population. Japanese already strongly keep the first place for a long time in the world on average life expectancy: 77 years for men and 83 years - for women. There are no bases to believe, that these indicators will worsen in intermediate term prospect. Simultaneously, birth rate is falling year by year in the country. Government is accusing Japanese females whom with great unwillingness to marry because of their attaining material independence. If the given tendencies remain, by 2050 experts of United Nations (The UN) believe, in Japan the people elder than 65 years will exceed 40 percent of the whole population. In this diagram is described detailed changing shape of Japan's population. (http://news.bbc.co.uk)

ACTIONS BY INDIVIDUALS AND SOCIETY

At the moment Japan's population is around 128 million. Currently there are 44 million families (after war was twice less) in “The Land of the Rising Sun”. And 12 million from them consist of two people, and 10 million - generally singles. According the “Men's Health” magazine in the XXI century ­ two thirds of Japanese will live the rest of their life on their lonesome. But it necessary to note, either the children or their parents want that. In medieval Japan ­ there was a brutal ­ custom called «Ubasute». Then inhabitants of poor settlements carried away the grown weak old men to the mountains and after farewell ritual left them to die in loneliness. ­­The similar fate does not threaten present ­ generation of elderly Japanese­. But even in ­the mass media ­ sounds complaints of those who are compelled to look after ­ helpless 80-year-old mother or the father­­. In the countryside of Japan the proportion of old people is double the national average. But not only countryside even the most crowded cities like Tokyo we can see lots of crowd old people. For example, in northern Tokyo, the “Sugamo” shopping centre has turned to a place of a playground for the elderly people. There are no any bars, CD shops, coffee chains and fast-food corners instead of small little shops and the clothes shops, traditional meal and products for health - all are made for convenience of pensioners that reminds of increase in influence of demography. However, the majority of Japanese pensioners materially ensured their old age. The state pensions (about 600 dollars per month) which ­ are given from 65-year-old ­ age and are usually supplemented ­ with payments from private pension funds overall twice higher than the state pensions. According the conclusion of the Japanese ­ medical association, four conditions are necessary for ­ older people to feel themselves happy: to be healthy, to be economically independent, ­ to have friends and optimistically ­ thinking about a life. Certainly, that's good when people live longer and have the right to choose - to make family or to do career. However, ageing and population reduction are threatening Japan with the economic crisis. In 2000 the number of people at able-bodied age (from 15 years till 64 years) were 86 million people in Japan, though still in the mid-nineties there were one million more people at able-bodies age. By 2050 in the country remains no more than 57 million potential workers, who pay taxes and contain old men being on deserved rest. If in the 1980's each pensioner was supported by 8 workers' wages in corresponding funds in Japan, but by 2015, this indicator will decrease by two and a half workers. It means Japan will face necessity to spend the large amount of its incomes on the pensions and medical privileges for old citizens, due to catastrophically falling tax revenues from the population. As a result the country can turn out tax thresholds of the budgetary collapse with all resultant consequences. But Chief Cabinet Secretary Yasuhisa Shiozaki said: "It's impossible for the pension system to collapse due to the declining birth rate because we will adjust the amount of money put into it". In October, 2008 a government panel recommended reviewing social security payments to the elderly to guard against a possible system collapse.

ACTIONS BY THE

GOVERNMENT

In 2005 for the first time since World War II the Japanese population declined, the survey by the National Institute of Population and Social Security Research for the ministry of health noted. Recently, a Japanese government announced Children's Day as a national holiday, hoping any positive changes against declining population. But according the latest Tokyo government report, the number of children has declined for the 27th consecutive year. Children have fallen to an all-time low of 13.5 percent of the population. “Japan is sitting on a demographic time bomb, an explosion is going to take place. They see it coming, but no one is doing enough about it” warned Kazuhiro Asakawa, a business professor at Keio University. (Article from: http://www.worldtribune.com) There is also potential net population loss, due to falling birth rates extremely fast, because of young Japanese females who not only do not wish to marry (in Japan middle age of the marriage - at 27 years), but also, make a family and avoid to have children for the sake of their office career. Japanese women think that it is difficult to work and have kids together. In 2008, during the special interview with Japanese women about “Japan demographic crisis” by BBC's new reporter Philippa Fogarty, several Japanese women shared with their opinions. And one Tokyo student said: "Everyone has the impression that raising a child is very expensive". Another Japanese housewife Mitsuko Kamaya said: "Many women want to work and have kids, but it's still the case that it is either work or kids. Women feel that they have to throw one dream or the other away. If there was a system that guaranteed women could get back to work, I think more would feel secure enough to have kids". Furthermore, a teacher, Dr Inoguchi said: “the government needs to spend more on helping young families”. As you can see, the demographic changing created misunderstanding between citizens and the government. Because the government think citizens don't act enough for solving this problem and citizens think opposite of it. By the way, even some of the government officials put forward the idea about imposing these young, living beside their pleasure women by the high tax for childlessness. But this bill was not approved by the Japanese Parliament. It has considered ­ as human rights violations. It goes without saying that to give birth or not, it is the private affair ­ of the woman. Otherwise, it would be as in ­ a militaristic Japan where ­ a patriotic debt of each family was considered to present to the native land at least two sons in the 1940's.

JAPANESE YOUTH AND DEMOGRAPHIC DIFFICULTIES

The Ministry of Labour of Japan has expressed concern about many young men who refuse to work in large corporations ostensibly threaten prosperity of the country. During economic launch of Japan in 1980's reception of a constant place in large Japanese corporations were considered as the top of success which guaranteeing well-being and the stable income. However the modern Japanese youth which has received secondary education and even higher education, prefers to work on the temporary jobs which are not demanding the vocational education, without any prospects of growth. Since 1982 the number of such kind of young men (called “Frita” in Japan) has trebled on the temporary jobs, and already composed over 1.5 million youth people. According to the research by request of the Japanese government, the number of graduates of schools which do not try to search for "career" work twice surpasses number of those who searched for such work, but has not received. About 80 percent of the Japanese unemployed have left their job for personal reasons or never search for it at all. The situation aggravates the fact that nowadays Japanese youth do not desire to be occupied by prestigious physical work and this creates serious problems for the whole economic sector which can destroy “incredible business structure” of Japan. The strategy structure in large Japanese corporations which use during centuries assumes, that the young man long enough works on the lowest posts, receiving the small salary, but receives a guarantee that will work there till their retirement age without any threatening of job cuts, gradually receiving the escalating salary. However as a result of a series of bankruptcies of the large enterprises the trust of inhabitants to such style of work has strongly fallen in Japan. About 20 percent of the Japanese youth do not try to find a job at all and do not plan the future, being content casual undermining. The strategy about system of lifelong hiring and a legend about fidelity of the worker to firm which made Japan one of the best industrial developed countries may become a textbook on economy history in future due to radical thinking of the Japanese young people and different sights of youth from vital principles of old generation can absolutely change the future shape of the Japan.

DISTURBANCE OF THE INTERNATIONAL ORGANIZATIONS

In January, 2009 The United Nations extended the report on a demographic situation in the leading industrially developed countries which has caused a shock to Japan. Experts of The United Nations advise Japanese government annually to accept not less than 600 thousand immigrants and bring their number up to 33 million people by 2050, in order to fill promptly reducing able-bodied population. Meanwhile, the migratory policy of Japan is rather specific. This country tried to protect itself from penetration of strangers and possesses practically national homogeneous population during several centuries. "The Japanese, who have maintained xenophobic immigration policies and have tried hard to replace an aging work force with robots so that they don't have to rely on immigrant labor." (According to an article in the Washington Post). Tokyo does not hurry to follow advice of foreign experts though the government has already canceled gradually restrictions on use of a foreign labour. For example, it has already decided to introduce two-year “working practice” system for foreigners in Japan. However the majority of citizens of the country are not ready to that million foreign expats would settle next to them with their strange customs. In private conversations, the Japanese officials frankly name introduction of a mode of more free immigration “cultural suicide of the nation”. By the way, some Japanese experts suggest considerably lift a lath of working age as an alternative to mass import of a foreign.

ACTIONS BY BUSINESSES

The Japanese companies start to feel increase of the labour shortage exaggerated by decreasing interest among youth in a science and working out. One official source says that one only the digital industry of technology is already short almost a half-million of engineers. Despite some slowdowns in production due to global economic downturn, the requirement for a foreign labour grows because of the decreasing of Japanese population. It seems almost all large-scale industrial companies in Japan need foreign labour because of the labor shortage at the moment. For example, it will be difficult for «Toyota Motor» the largest automobile company of Japan, to make the cars without foreign labour. One tenth from the general number of workers of Toyota, the former textile small town in the central Japan which now is a basis for the giant of motor industry is mainly composed from Brazilians and Chinese. Foreign labour work at the factories delivering spare parts and components from which «Toyota» makes the cars, in this way they help to support a life in «East Detroit».

As well as, last notably point of “demographic time bomb” hits to GDB (gross domestic product) of Japan. The following graph charts the relationship between real GDP growth rate and labor force population growth rate.

The experts (UN, OECD etc) predict that during the last stage of the demographic changes, the size of the labor force will decline, bringing down GDP. This will occur irrespective of policy. However, according to the Ministry of Economy, Trade and Industry “There is no clear relationship” between economic growth and population change which means Japan is adjusting to any relations between economic sectors and “demographic explosion”.

In conclusion I want to say that demographic changes have not come suddenly and without warning. The tendency has already been observed for many years. The Japanese administration has undertaken successful steps to boost of level of birth rate and introduce financial reforms, preparing to forthcoming increase in expenses. As well as, Prime Minister of Japan Shinzo Abe announced to bring in all policies that would prevent further demographic transitions. But the problems still remain.

Source: Essay UK - http://turkiyegoz.com/free-essays/economics/demographic-time-bomb.php


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