An Era of Population Shrinkage Now Begins

On October 31, the Statistics Bureau of the Ministry of Internal Affairs and Communications published its final report on the total population of Japan as of October 1, 2005, based on the national census conducted every five years. According to the 2005 census, the total population is 127,767,994 (approximately 62.35 million males and approximately 65.42 million females, the latter exceeding the former by 3.07 million). The total was smaller than the population estimated one year earlier by approximately 22,000.

The growth rate from the previous census in 2000 was 0.7 percent, a record low since the first national census was conducted in 1920, as well as the first time in post-war years for the population to be lower than the previous year. The population has finally started shrinking.

The proportion of people aged 65 and above was 20.1 percent, a record for the years since the census began, whereas the proportion in the 14-and-under age bracket was at a record low of 13.7 percent. While the disproportionate demographics are thus obvious, the disproportionate distribution of the population among the regions is also serious, with the over-concentration in Tokyo remaining the same. The number of people in Tokyo totaled 12.57 million, an increase of 4.2 percent (510,000 persons) from the previous census five years earlier. The mass supply of high-rise condominiums in Tokyo has continued thanks to a drop in land prices following the burst of the bubble economy, and more and more young people and households have forsaken the rural areas, which have increasingly lost their vitality.

The Special Issue in the Japan Labor Flash No. 63 referred to a decline in the population which outnumbers the estimated increase in births, and the subsequent concern about the impact on the pension and other social security systems in future. But what about the future labor force (i.e., workers and those who wish to work, aged 15 and above)? The Ministry of Health, Labour and Welfare estimates that the labor force in 2015 will be 62.37 million (a drop of 6% from 2004)  and 55.97 million (a drop of 16%) in 2030; thus, a decrease of approximately 10.5 million is expected over the coming 25 years.

A drop in the labor force may eventually act as a brake on the growing economy. To halt the drop, they say, it is essential to make the employment system more flexible to permit educated housewives, elderly persons, "freeters", and various other potential workers, to participate in the labor market. Another vital task is to make full use of foreign workers; the census shows that foreign nationals residing in Japan totaled approximately 1.55 million, an increase of 244,000 (18.7%) from the 2000 census.

The Japanese population has continued to decline this year. Even so, the total decline in the years ahead is expected to be only several tens of thousands at most. We must design and establish, before it is too late, a comprehensive system for new growth suited to an era of declining population.