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Anti-Declining Birthrate Policy of Another Dimension

Ichiro Suzuki In 2022, 811,604 babies were born in Japan whose population is approximately120 million. This was 29,231 fewer than in 2021, for a 3.5% fall. Only several years ago, births were not expected to fall to this level until around 2030 but the pandemic has accelerated the rate of decline. In response, Prime Minister Kishida has introduced a policy to stem the falling birthrate, calling it an anti-falling birthrate policy of another dimension. It has been understood that falling birthrates pose a long-term threat to the country‘s future. Recent PMs have all took this seriously and made an attempt to raise the birthrate. The late Shinzo Abe in 2007 created a new cabinet position of Minister of State for Measures for Declining Birthrate in his first stint as a PM. While this new position today has a firm place in the cabinet today, how seriously it is taken may be another matter. The current minister is the 22nd person for a position newly created 16 years ago. Anyway, past attempts to stem the falling birthrates have shown little results. This is what made PM Kishida call his policy is one of another dimension. Past policies, especially the ones under PM Shinzo Abe’s second stint in 2012-20 were committed to creating a friendlier environment for women to work. Policy measures included pushing large corporations to promote more women to managerial positions or higher, and driving local authorities to build more nursery schools that enable women with little kids to work. Abe’s policies had some results. A greater number of women have been promoted, if they are capable enough, of course. Corporations are providing a better working environment for working mothers and admissions to nursery schools became easier. Nonetheless, these policy measures have not turned birthrates around and COVID-19 made it worse. Then, here comes policy of another dimension. PM Kishida proposes handing out cash to all households with children of school age or below, multiplied by a number of kids, scrapping the income cap that has been in place. This certainly helps at a time when inflation is eroding real household income. It also demonstrates the country’s priority to the population. Cash handouts may not change life of well-off families much, but it sends a message on what is valued in the society, with potentially a positive long-term effect. The policy of another dimension, however, still misses key important factors that have been holding down birthrates. Younger people don’t get married. Even if married couple wish to have two or more kids, they refrain from getting married in part because they feel they don’t afford it. Suppressed income for younger generation is greatly attributed to Corporate Japan’s employment strategy. Facing massive structural changes that hit the Japanese economy since the 1990s, Corporate Japan chose to avoid layoffs as much as possible, instead freezing new hirings and dramatically expanding a legion of non-regular workers. They not only work without implicit long-term employment guarantees, but also have insufficient access to benefits that the company offers to regular workers. In a nutshell, these younger workers have been under decisively inferior employment contracts than those enjoyed by regular employees, most of whom are older. Corporate Japan took this path in order to hold on to the practice of life time employment. Those who belonged to the club benefited from it, while those outside the club had to suffer. The cost of defending lifetime employment has proven to be acute. As it turned out, it was defending old guards with vested interests at the sacrifice of younger generation who don’t belong in the the club. Crushing the interests of these regular and relatively well-treated workers is not in the interest of politicians, since they have a strong voice through the unions even if their power is not what it once was. Then there is an issue of rigid value system in the society. In Japan, only 2.3% of babies were born outside of marriage, according to the latest available OECD data in 2016, as opposed to the OECD average of 39.7%. Only South Korea showed a lower number than Japan at 1.9%, and this country is facing an even more serious demographic problem than Japan. While the number for China is not known not being an OECD member, it shout be very low as well. In recent years, Japan made some legal efforts to insure the rights of ‘illegitimate’ children. Nonetheless, children raised by a single mother is often seen with social stigma and might face subtle discrimination, for instance, in job hunting. Outside of Asia, in France, whose birthrate rebound in recent years has caught the developed world’s attention, well over half (59.7%) of babies are born outside of wedlock. This shows it is not only about cash handouts. Sweden and Denmark, for which Japanese people always have a cherished yearning, respectedly had 54.9% and 54.0%. Chile leads the OECD, and probably the world, with 72.7%. Mexico has 67.1% despite Catholicism’s dominance. The United States is right on the OECD average, which is some 37% higher than Japan. Surprisingly, the U.S. ranks on the conservative side among the OECD members on this issue. Many countries witnessed marked upswings in this ratio over the last half a century. In Denmark, for instance, it jumped from 11.0% in 1970 to 54.0% in 2016. For the U.S., it went from 10.7% to 39.8% between 1970 and 2016. In Japan it hasn’t changed much up from 0.9% to 2.3%. While the world became considerably liberal on this in the last 50 years, Japan didn’t get on to this trend. Openly allowing, if not promoting, babies born outside of wedlock is something that the Japanese society is not prepared to tolerate, at least not in the next two generations. Conservative politicians in Japan, the vast majority of whom belong to the ruling Liberal Democratic Party, would fiercely detest it. For that matter in the U.S., this is not an issue in the culture war. Old guard Republicans say nothing about it, probably because this is well accepted among voters, even in red states. Talking about this is almost a taboo in Japan. The society that is so well-mannered and so meticulously organized is also very rigid on its flip side. If more ‘illegitimate’ children are one of the answers to raise the birthrate, there is no way Japan can achieve it. PM Kishida’s policy of a different dimension would end up with disappointing results. About the author: Mr. Suzuki is a retired banking executive based in Tokyo, Japan.


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