East Asia's 'Elderly Zone' Has Valuable Lessons For The World

Japan’s aging population burden may carry latent economic blessings. There are two ways to look at the Japan’s ageing population. On one hand, Japan possesses a degree of longevity that the world ought to envy. On the other, Japan is faced with an aging society groaning under a growing social security burden. Yet surely, a long life is a good thing. Taken from an insighful article in Japan’s Nikkei news.JPEG

Tokyo’s Akihabara district is home to a company that has put a twist on the temporary staffing agency model. All 360 of the prospective workers who have registered with Koureisha (translates as “Old Age Co.”) are aged 60 or older. Koureisha’s oldest worker is 79. The company handles more than 50 types of jobs, including gas meter inspections, production facility construction and condo management. With an eye toward the looming labor shortage, it hires out post-retirement senior citizens as temps.

The company seems to be on to something – Koureisha’s sales have grown to 300 million yen ($3.2 million), 8.5 times what they were five years ago.

Seniors who feel it is too early to retire are helping to support economic activity behind the scenes. These people developed useful skills during their days of regular employment, and their desire to work remains strong. In a country of long life spans, a new work model seems to have sprouted. A team from Boston University in the U.S. even came to do research on the subject.

Today, Japan has a working population of 66 million people. A decade from now, that number is expected to drop by 5 million. The nonworking population, meanwhile, is 45 million.

In 2008, Marubeni Corp. established Marubeni Pulp & Paper Engineering Corp. It is the only organization of specialists in Japan that supports the construction of papermaking plants. Working there are former engineers who used to service production lines in Japan’s paper mills. Of the company’s 33 full-time employees, 23 are aged 60 or older, the oldest being 72. In January, it hired six more people in their 60s.

The background for this energetic activity is the relocation of papermaking plants to Asia. Paper production is a task for artisans. Which wood chips should be used – those from evergreens or deciduous trees? What about the humidity and temperature of the plant? Those who know the answers to these questions, having cultivated their skills in Japan, are invaluable for the shift.

The speed and scope of Japan’s aging is a new experience for humanity. “Now is the time for us to establish business models and social systems that focus on the elderly and create strategies that the rest of Asia can follow,” said Akira Morita, 58, director of the Todai Policy Alternatives Research Institute.

One could say Japan needs a system that taps the latent abilities of the aged. It is companies and national manpower that combine to create value. If corporate society does not thrive, employment will not rise, tax revenue will not increase and funding for government policies will be unavailable.

Another interesting example is the small village of Shimojo, Nagano Prefecture. Senior citizens make up 30% of the village population, yet it has a healthy birthrate. Japan’s population is expected to decline 4% by 2020. Shimojo’s, in contrast, is projected to grow 4%.

The village used to have 60 town hall employees, but it reduced the number to 35 and outsourced work to the private sector. This enabled it to run a budget surplus. Nursery school fees were lowered, and housing is rented inexpensively to households raising children.

The 1,200 people aged 65 or older do their part, such as by maintaining the farm road that passes by the village. Women who have finished raising their own children put their motherly expertise to work by helping to raise other children in the community.

Aging tends to be viewed as a burden on society. However, if Japan can quickly establish an economic model that exploits the longevity of its people, it could become a model for the rest of the world. This country, with its declining birthrate and population that is aging at the fastest rate in the world, could actually be in an enviable position.

A decade from now, the ratio of people aged 65 or older will rise to 29% of the population, from 23% at present. As if trying to keep pace, South Korea and Singapore are closing in on 20%. In Shanghai, 30% of the population will be senior citizens.

East Asia, which is growing into the world’s largest economic zone, is also becoming an “elderly zone.” Perhaps Japan can use the wisdom of its aging population to make this a positive thing.

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