Japan faces aging, declining population

By JOSEPH COLEMAN, Associated Press Writer
Sat Jul 1, 11:45 AM ET

KAMIKATSU, Japan - Tsuneko Hariki is 84 years old, and she looks it. Her fingers are thick and crooked from years of hard farming; bent low, she shuffles around her rural home on stiff, bowed legs.

Sweet as her smiling, wizened face is, Hariki poses Japan with perhaps its gravest challenge of the early 21st century: how to keep its economy and society vibrant as its population rapidly ages and declines.

In a first among the world's top economies, Japan's population began to fall last year, and coming decades will bring legions of people such as Hariki demanding pensions and health care.

In the process, Japan will become a global test case in how — or even whether — a shrinking, aging society can sustain a top-flight economy.

But in her own small way, Hariki's case also points to the glimmer of a solution.

Healthy and active — Japanese women lead the longest lives in the world — she doesn't spend the hours alone watching sitcoms or living in the distant past. Instead, Hariki is doing what she has always done: She works.

Every day she gets up and turns on a computer provided by her town, Kamikatsu, with a specially designed keyboard and mouse for her aged hands. She closely checks the day's market prices for her products — cherry blossoms, nandina leaves, Japanese maple.

Then she and the rest of her extended family pick what they need from the trees on their property on the island of Shikoku, about 300 miles southwest of Tokyo. Hariki arranges the leaves neatly on plastic foam trays and wraps them in plastic. A relative then takes them to market.

The cottage industry, producing elegant seasonal garnishes for high-class cuisine, not only keeps Hariki and others in the town busy. It also earns them cash. Hariki has raked in enough to help two of her grandchildren make down payments on homes.

"If I couldn't work, I would just go senile," Hariki said, squatting on a tatami mat in front of her computer. "I'm really thankful that I have something to do to keep me busy."

Japan has a surging number of seniors to keep busy these days.

The government announced in early June that more than one in five Japanese is now 65 or older, and that ratio could rise to one in four in the next decade. The senior population reached 25.6 million in 2005, a record high. The country has some 25,000 centenarians, about the same percentage of the population as the 50,454 centenarians in the U.S. in 2000.

One reason for all the old people: Japanese women had a life expectancy of 85.6 years in 2005, the world's highest for the 20th straight year. Japanese men live an average of 78.6 years, second only to Icelandic males.

Another reason: The fertility rate is hitting rock-bottom — 1.25 children per woman, far below the 2.1 needed to keep the population steady. The U.S. rate is 2.04 children per woman.

Those two trends converged at some point last year, when Japan silently marked a demographic watershed: The population started to drop, beginning a long decline that demographers predict will cut the number of Japanese from 127 million now to about 100 million by 2050. Three of every 10 will be over 65.

It's already visible in the gleaming nursing homes cropping up in every corner of the archipelago, while once-crowded schools are closing for lack of students. Some 4,000 have shut their doors in the past 20 years.

The eventual effects on the world's second largest economy — labor shortages, skyrocketing health costs, slumping production — are weighing heavily on policymakers' minds.

The government has moved to trim health and pension benefits and provide more nursing care, and is tinkering with immigration controls to let in more foreign elderly-care workers. There is also talk about raising the retirement age, now a relatively low 60.

The main focus these days, however, is on having more babies.

"The rapid decline of the birthrate is a major problem that may shake the foundations of our society and economy," said Kuniko Inoguchi, a government minister tasked with coming up with countermeasures. "Tackling it now is a battle against time."

But the roots of Japan's low birthrate run deep.

Men work long hours, leaving child care almost exclusively to women. So women wanting careers are marrying later on the biological clock.

Public day care is in short supply with limited hours, and private care is expensive.

Conservatives who think mothers should be in the home resist making it easier for them to work. The government is pushing to expand child care and speeding child allowance payments to new parents, but budgets are tight.

At the Central Friendship Hall, one of 31 play centers that have opened in the Tokyo suburb of Kawaguchi since 2000, women can bring their toddlers three days a week. It's free, aimed at encouraging women to have babies.

Some of the mothers there said women are marrying too late to have two kids, and husbands aren't pulling their weight in sharing the housework.

"I'm jealous of women in foreign countries," said Naoho Yoneda, 31, who came to the center with her 8-month-old son, Takuma. "The children seem to have plenty of places to play, and women can work and raise children at the same time."

But it will take far more than part-time day care centers to generate the workers needed to power industry and pay the taxes to support the exploding elderly population.

As a quicker fix, some Japanese advocate immigration, but it's a complicated question in Japan, which was closed to outsiders for two centuries until the mid-1800s and still largely associates foreigners with crime and social disorder. So even supporters of increased immigration stud their arguments with caveats.

For some, all these efforts are misguided.

Akihiko Matsutani, a former Finance Ministry official, writes in his book "Shrinking Population Economics" that raising the fertility rate is futile, and that Japan will be unable to accommodate the massive numbers of foreigners needed to reverse population decline.

Instead, Japan should retool industry and society to accept the inevitability of population decline and a shrinking — but still potentially successful — economy, he says.

"Effective public policy and effective business strategy will depend on learning to cope with these trends," Matsutani said. "Our national and local governments and our companies need to avoid wasting time on futile efforts to prevent the unpreventable."

Whatever the answer, the folks on remote Shikoku island don't have time to wait for government or industry to work it out. For them, Japan's future elderly society has already arrived.

Nearly half of Kamikatsu's 2,200 inhabitants are 65 or older, and the key to the town's survival rests with keeping them active and productive — not with encouraging childbirths or importing foreigners.

"Old people can play a useful role in society. That's the kind of town we want to create," said Tomoji Yokoishi, vice president of a town-started agricultural cooperative, Irodori Co.

Irodori was set up in 1999 after officials hit on the idea of shoring up the area's economy — formerly dependent on lumber and oranges — by getting the elderly more involved in the garnish trade.

Today, the cooperative has 177 members. The average age is 70. The oldest is 94.

Getting seniors on the Internet has been tried elsewhere in Japan. But Yokoishi said that Kamikatsu improved on the model by making computers a business tool rather than just a form of entertainment for the elderly.

"People are happy if they have a goal," he said.

The Internet has been a revelation for Makiko Shobu.

Every morning, she fires up her Logitec and checks the Web site of the Kamikatsu Information Center for the latest prices. Then she and her husband, Kiyoshi, 80, amble out to their hillside property to pick whatever is selling best.

"I was scared to touch it at first," she said of the computer. "But now I'm used to it and it's fun to use."

It's not only amusement she's after. At the height of Japanese maple season last November, she made some $7,000 in a single month.

"I have a real feeling of abundance," she said, squinting through her eyeglasses in her workroom. "If I'm doing a fun job, then I won't get sick."

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