“The responsible exercise of parenthood implies, therefore, that husband and wife recognize fully their own duties towards God, towards themselves, towards the family and towards society, in a correct hierarchy of values.”
-Pope Paul VI, Humanae Vitae 1967
“If our birthrate should again decrease as it did 15 years ago, and that decrease should continue, would we not become the prey of other nations? History does not reveal the survival of a single nation with a declining birthrate in a moment of trial and crisis.”
-Bishop Fulton Sheen, Communism and the Western Conscience 1948
Japan’s birthrate decline and economic challenges...from a business perspective:
What America can learn:
On November 23, 2012, Roben Farzad, from Bloomberg Businessweek reported, “Last year, for the first time, sales of adult diapers in Japan exceeded those for babies...”
Farzad continues: "In 1989, Tokyo-listed shares represented nearly half the planet’s equity value, while the land beneath the city’s royal palace was worth more than all of California. American nightly news anchors practically misted up when they had to report that Rockefeller Center was turning Japanese.
Two lost decades and massive property- and stock-bubble explosions later, Japan is a one-word cautionary tale. Caught in economic and demographic atrophy—and stewarded by countless false-start prime ministers—the country has become a hub for zombie banks, a generation of disenchanted youth, and fading brands such as Sony (SNE), Sharp (6753:JP), and Panasonic (PC)...
James Hunt, portfolio manager of Tocqueville’s International Value Fund and a rare Japan bull, concedes: One of the questions we are asked most often by investors is why we would invest in Japan. Normally, there is a slight tone of derision in the question, as if to say: ‘Everyone knows that Japan has poor demographics, a huge public debt and weak growth prospects.’ And of course, all of these things are true.’ Elsewhere, Hunt says, ‘Everyone thinks Japan is sinking into obscurity.’”
A few months earlier, Michael McDonough, in the Bloomberg Brief, reported some alarming demographic challenges Japan will inevitably face :
“In less than two years, more than one in four Japanese citizens will be over the age of 65, up from one in five in 2006 and one in 10 in 1985. The proportion of the population over 65 is expected to swell to 30 percent by 2022 and to 40 percent by 2050, according to government estimates. This will put the country as a whole in the demographic range of the prefectures that experienced the sharpest declines in growth in the decade ended 2009.
Fewer workers and less labor will reduce the potential output of the Japanese economy, which will increase the country’s reliance on imports as retirees continue to spend, inhibiting GDP growth. The rising number of retirees will strain the government’s welfare programs and the country’s pension funds, which have been major buyers of government bonds. Japan already maintains the world’s second-largest debt load in nominal terms at more than $13.7 trillion and growing.
The government sees this problem. Last week, Japan’s lower house of parliament passed a bill giving private-sector workers the right to remain at their jobs until the age of 65, rather than the current 60.
Japan’s demographics will also likely have an impact on consumer behavior. Japanese consumers older than 65 are less likely to shop for alcohol, clothing, books and electronics compared with younger consumers, according to a McKinsey survey from 2011. The average senior shops for books and clothing 38 and 35 times per year, respectively, compared with 73 and 58 times for people between the ages of 18 and 34. The only item seniors shop for more frequently than younger consumers is food, McKinsey found.
How Japan faces its demographic challenges over the next several decades may provide important lessons for countries such as China, which has a rapidly increasing senior population due largely to the one-child policy. People over 65 account for nearly 10 percent of the population in China — similar to Japan in 1985 — up from 6 percent 20 years ago.”
