There is an interesting phenomenon happening in Japan right now. According to Japan's Ministry for Internal Affairs and Communications and Cabinet office data, young workers in Japan (individuals under 60) have declined in their consumer spending since 2002 while those individuals (60 and older) have increased in their percentage make-up of consumption since 2002. It is believed that young people are saving for retirement but so much so that it is hurting the Japanese economy. Within the article cited, it is stated that, "Though they account for more than a third of the population, those over
60 contribute nearly half of consumer spending, according to government
data. Spending by seniors is offsetting falling consumption among
younger generations, according to UBS." Another large reason for this decline among spending from younger communities is attributed, according to a report from Goldman Sachs, from a large decline in spending from consumers in their 40s and 50s because of a lack of change in incomes and a rise in "social insurance premiums." This phenomenon is very intriguing and makes you wonder how the Japanese government could stimulate this decline in consumer spending.
https://www.bloomberg.com/news/articles/2016-12-04/silver-spenders-are-propping-up-japan-s-economy
That difference between GDP per working age adult and GDP per person is really the signal of Japan's demographic crisis. They're bleeding off huge amounts of wealth production to care for an elderly population that isn't in the labor force itself.The first and best thing to do would be to start making a lot more babies and get its fertility rate up a bit
ReplyDeleteI agree with what Julien said but the government must also give the younger population incentives to spend on consumption by finding ways to create increases in changes in income and also by lowering social insurance premiums
ReplyDeleteBack home they say that the health of a country can be determined by the way the government treats its old people. Basically the people that cannot bring much to the country such as pensioners.
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