Print

Email story

Comment

Email editor

Retiring boomers leave Japan in lurch

By ASSOCIATED PRESS
Published March 31, 2007

ITO, Japan - The way Masahiro Shimizu sees it, he and Japan's other postwar baby boomers built the country into an economic powerhouse - and now it's time to enjoy the fruits of their labor.

Shimizu will leave his job in the department store business next year, having become one of some 5.4-million Japanese boomer employees who will reach the standard retirement age of 60 over the next three years.

The retirement of the boomers, which kicks off in April with the start of the fiscal year, is a signature event for Japan, symbolizing a rapidly aging society, a looming fiscal crunch and the emergence of a roaring "gray economy" fueled by free-spending retirees.

The impact of mass retirements is expected to be limited at first, but the debate - which to some extent mirrors the one in the United States over Social Security and longevity - is in full swing, and the retirement age is already edging upward.

Shimizu, 59 and married, could have stayed on until 65 - in fact the government would be delighted if more boomers made that choice and softened the social security burden. But Shimizu isn't interested.

"Up till now, it's been all about the family," he said while visiting an exhibit of a retirement village planned in the resort town of Ito, south of Tokyo. "Now my son and daughter are on their own ... so I want to be independent and do what I want."

Born between 1947 and 1949, before abortion laws were loosened to prevent overpopulation, the estimated 7-million baby boomers grew up as Japan rebuilt itself after World War II, and moved into the job market as the economy took off. They hit their prime in the '80s - just as the economy peaked.

Now they are entering their golden years as Japan confronts the potentially dire social and economic consequences of societal aging and moves to reform employment and pension schemes.

Last year, the government started requiring companies to gradually raise the retirement age to 65 or find other work for aging employees. The qualifying age for pension benefits will also slowly increase from 60 to 65 to keep the system solvent.

Already, more than 20 percent of the population is 65 or older, and that will rise to more than 30 percent by 2050. Boomers account for an estimated 8.6 percent of the work force - and their sudden disappearance from Japan's offices and factories would be a blow to the economy at a time when the overall labor force is shrinking.

"This has spurred concern about the loss of laborers, but also the loss of a highly skilled, highly capable group of workers," said Atsushi Seike, a Keio University economist and adviser to the government on social security and aging issues.

Planners expect more than half the boomers to stay productive well past 60, and the government won't hazard a guess as to how many will retire this year, but Nippon Life Insurance Co. estimates some 1.12-million will leave the work force over the next three years.

Although that's less than a quarter of the over-60 workers, Japan's boomer-retirement wave is coming much harder and faster than America's.

Japan's baby boom started later than America's and lasted three years compared with 19 in the United States, says John Rother, policy director at AARP.

"The U.S. has a healthier economy, a growing population aided by immigration, and retirement institutions like Social Security that although now are under pressure, could be strengthened by small modifications," he said in an interview. "That is not the case in Japan."

But Japan has an advantage: It has a long-term care program and "everyone has a pension," Rother said. "What's obvious is that we're going to have to spend more on health care."

[Last modified March 31, 2007, 01:51:41]