Japan's Population Trends Compound Tsunami-Caused Labor Issues

---

Researched by Industrial Info Resources (Sugar Land, Texas)--Following the Great East Japan Earthquake on March 11, 2011, many foreign residents returned to their home countries in the largest mass exodus of foreigners in Japan's history. Those that fled the country represented people from all walks of life, from fast-food employees to high-level engineers at prominent Tokyo-based firms. While many returned to their previous positions amid heavy criticism from their Japanese co-workers, a large portion of those who left did not. Thus, a large population of workers on whom Japan had pinned its hopes for a stable labor force vanished and left the country to depend on its own citizens, many of whom are approaching retirement age.

Much like the U.S., Japan experienced its own baby boom between 1947 and 1949, when roughly 8 million people were born in the country. Japan's set retirement age is 65, when retirees can begin to receive their government pensions. The Japanese labor force is seeing a large portion of its workers retire this year, and probably will continue to see similar numbers for the next few years. As a result, the Japanese government is under pressure, as it must pay out so many pensions at once with a dwindling pool of tax revenue from which to draw.

Japan's government is investigating several possibilities to pay out pensions, including raising the retirement age or reducing the costs of medical care. Other options include increasing the consumption tax or required social insurance premiums, but, predictably, neither of these options are very popular.

Labor in Japan, as represented by population numbers, is seen to be moving from east to west. This is a direct result of the Great East Japan Earthquake, as residents of northeastern Japan move west, away from the devastation. This is causing local prefectural governments in the northeast, namely the Miyagi and Iwate prefectures, to put preliminary local business restoration activities on hold, and shift their attention to securing a workforce in the lower age brackets. All this work takes place amid the prefectures' efforts to attract their citizens back through radiation cleanup and industrial reconstruction. There also are movements, such as one in Iwate, which was affected heavily by the earthquake, to attract foreign workers to the region to assist in regional development and rebuilding.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, and eight offices outside of North America, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.