How will the “Year 2007 Problem” change Japan?!

Japan is now facing the "Year 2007 Problem." This looming predicament is due to the fact that a huge social restructuring will take place in Japan when the "baby boomer generation" begins retiring from 2007. The baby boomer generation (6.8 million people) was born between 1947 and 1949 and the population ratio of this group is extremely high compared to other generations. There were 20% more Japanese born during those three years than in the previous three years, and 26% more than in the following three years. It is thought that soldiers returning from World War 2 had many children out of relief that the war had ended.

The large baby boomer generation has influenced society in many fields. Their self-assertion came in particular from the competition they had experienced since they were young. When they grew up, many in urban areas took part in university reforms and the anti-Vietnam war movement, while those in local areas moved to the cities en masse to make up for labor shortages created by Japan's rapid industrialization. They were welcomed as "Golden eggs." This situation was just like that in present-day China where people are moving from the countryside to the cities in search of jobs.

When the baby boomer generation became independent from their families, a housing shortage emerged. Many housing complexes were built in the suburbs of big cities and satellite cities were born. Since the population of suburbs became swollen and less people lived in city centers, this population growth was called the "Donut Phenomenon." As commuters from these areas rapidly increased, construction of new railways and reconstruction of roads began, which became a key factor in the accelerating growth of the Japanese economy.

The Retirement of the "Baby boomer generation" is leading to a "Super Aging Society" More than 2.8 million people will reach retirement age between 2007 and 2010, and they will move from paying into the pension system to receiving it. Companies will have to pay out huge amounts in retirement allowances and lose many experienced staff at the same time. This mass retirement will change the structure of industries and society. On the other hand, many new businesses will appear and target this generation that will have large amounts of spare time and money.

Approximately 90% of Japanese corporations have implemented an age-limit employment system and 90% of them have set the retirement age at 60 years old. The "Aged People Employment Revised Law" places corporations under the obligation to adopt one of the following measures by April 1, 2006: raising the retirement age to 65 years, abolishing the retirement age, or offering part-time employment to staff of retiring age who wish to continue working. However, employees who are chosen to continue working will be limited to those who have produced good results, since the law allows companies to select workers upon agreement between labor and management. Therefore, considering the above, there is a low possibility that the "Year 2007 Problem" will be dealt with by corporations extending the retirement age of their staff.

After the Year 2007 Problem, Japan will face another dilemma - a "Super Aging Society." According to statistics announced by the Ministry of General Affairs on "Respect-for-the-Aged Day" (September 19, 2005), there are 25.56 million people aged over 65, comprising 20%, or one fifth of Japan's population. This percentage is high when compared to Europe and the USA. When this group is compared to the population of productive workers (15 years ~ 64 years), it is 30%. Approximately three workers support every retired person. The rate of working retirees is 19%, which is extremely high when compared to 14% in the USA, 6% in Britain and 1% in France. In 10 years time people aged 65 will comprise 26%, or one quarter of the population. The "Year 2007 Problem" will be the start of the "Super Aging Society."

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