Shortcuts / 06 July 2023

Shrinking populations

We’ve heard a lot about overpopulation but for some countries including Japan and South Korea, the issue is not too many people, but too few. So in this Squiz Shortcut, we take a look at why some populations are shrinking, what those countries are trying to do about it, and if too few people is really such a big deal.

So what’s happening in Japan and South Korea?
Basically, their birth rates are plummeting and both countries are desperate for people to have more kids. Back in January, Japan’s PM Fumio Kishida gave a major speech warning that “Japan is standing on the verge of whether we can continue to function as a society”.

He didn’t mince his words…
No, and Japan’s population has actually been shrinking for the past 12 years, so it’s not like this issue has come from nowhere. Its population peaked in 2008 at 128 million people and since then, it’s been losing a few hundred thousand people every year. It fell to around 125 million last year.

That still seems like a lot of people…
Compared to a less populous country like Oz it is but it’s considered a major crisis in a country that has the world’s 3rd biggest economy behind the US and China.

Because authorities are worried the birth rate will keep falling?
Exactly. So Japan has one of the lowest birth rates in the world – for every woman there are only 1.3 children being brought into the world – and demographers say that’s way below the replacement rate.

What does that mean?
That’s the number of people a country needs for its population to remain stable. And without immigration, you need a birth rate of about 2.1 to do that.

And what about South Korea?
Glad you asked – it’s actually right at the bottom of the reproducing pile. It’s only got a birth rate of 0.78.

So not even one baby per couple?
Exactly. And the reason why these low birth rates are such a big issue in Japan and South Korea is that both of them have strict immigration policies, so foreigners only make up around 3% of the population.

Which is pretty different from Australia…
Yep, 30% of our population was born overseas – we’ve really relied on immigration for population growth since our birth rate fell below 2 in the 1970s. There are a lot of different ways to become a permanent resident or a citizen.

But that’s not the case in Japan or South Korea?
Nope, so those countries are trying to work out how to manage a falling population while not opening the door wide open to migrants.

What are they doing instead?
Starting with South Korea, back in March its government floated the idea of raising the legal limit on how many hours you could work in a week from 52 to 69.

Yeah, nah…
That was basically the reaction of the country’s Gen Z and Millennials – and there’s actually a Korean word ‘kwarosa’ that literally means death from overwork…

So what happened?
South Korean President Yoon Suk Yeol ended up backing down but there’s still lots of resentment among young people because they already work some of the longest hours in the developed world. So the government essentially told them they wanted them to work longer hours while also having more children.

Where are they meant to find the time?
That’s the problem. The government tried to sell these working hours as a way to create flexibility, saying families could bank extra time off and use it for a holiday. But in reality, critics say men would be in the office all day and all night – and if a family did have a child, the women would be expected to do all the caring.

Right. What is Japan doing about the issue?
It’s a bit further down the road in trying to turn things around – they’re giving families money when they have a baby and then pay them a monthly allowance until the kids graduate from high school.

So they’re literally throwing cash at the problem?
Not quite – the government has also recognised it had to do more to encourage women’s overall happiness. So it’s looking at how it could support flexible working hours for both mothers and fathers to start breaking down those traditional gender roles in Japan.

Why is a shrinking population a big deal anyway?
The big problem for policymakers in countries like Japan and South Korea – where life expectancy sits around 84yo – is that there aren’t enough working-age people to support the older population.

So they’re not collecting enough income tax?
You got it – countries need plenty of workers to pay taxes so governments can afford all the services it needs for a country to run including health care and age pensions.

It’s a big topic here in Oz too… But is a shrinking population really something to be worried about?
Well, the interesting thing is that the United Nations Population Fund doesn’t think it’s a problem at all. It says that because the global fertility rate is sitting at about 2.4 – meaning the world’s population is growing – we need to accept that migration is going to be the key driver of all countries’ population growth.

And the UN reckons that’s a good thing?
Yep – back in 1950 there was a global average of 5 births per woman, and the UN considers the fact that that has since decreased is a sign women are exercising control over their own reproduction.

A lot has changed for women since the 1950s…
It sure has, and countries are finding out that tackling this is about more than just a few handouts. Women aren’t going to have kids unless there’s good affordable childcare, sharing of parenting roles and an equal chance at a career. They don’t want to be stuck with the assumption that they will do all the child-rearing and caring for ageing parents.

And maybe technological advances will help?
That’s what some economists are saying – they reckon artificial intelligence could be a solution for countries with fewer workers to boost output without adding extra people. And Japan and South Korea are already pretty cutting-edge in this space.

Sounds like there’s a lot of work to do…
Absolutely – it’s going to need some really innovative thinking. Nations around the world will be watching closely to see if they can maintain their standards of living with fewer people.

Squiz recommends:

Japan’s Shrinking Population Faces Point of No ReturnNewsweek

OECD country birth rate tool

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