Hist 131/445 21st Century Demographics:

According to Kanamori Toshie's memoir, an "Aging Society" is achieved when 7% of the population is over 65 and once that proportion reaches 14%, the society can be considered an "Aged Society." This happened to Japan in 1994. Kingston estimates that 25% of Japan's population will be over 65 by 2025 and Kanamori says that this figure will rise to 35% by 2050. Actually, as of late 2023, the figure is already at 29.1%! Startling figures!

Also startling is Kingston's figure that by 2025, 4.3% of the Japanese population will be over 85 years of age, up fivefold since 1965.

 

There is a Woodrow Wilson Center paper that notes:

The writing is clearly on the wall: Japan needs more tax-paying, young citizens to offset its ever-increasing number of pensioners if these retirees wish to maintain their current standards of living. The question, however, is whether there are public policies that can provide a solution to this impending crisis, and what may happen if the number of Japanese retirees continues to surge past the number of workers. See http://www.wilsoncenter.org/article/tackling-japan%E2%80%99s-demographic-time-bomb

 

Another source mentions that "Japan's population began falling in 2004 and is now aging faster than any other on the planet. More than 29% of Japanese are already 65 or older. A report compiled with the government’s co-operation two years ago warned that by 2060 the number of Japanese will have fallen from 127 million to about 87million, of whom almost 40% will be 65 or older. This source goes so far as to say that: "Roughly 2% of Japan’s population is foreign. And even this figure includes large numbers of permanent residents—mostly Chinese and Koreans—who have been here for generations. Tellingly, the recent story about the government’s discussion of immigration broke in the right-wing Sankei newspaper (in Japanese), which is especially unlikely to embrace the idea of a Chinese family living on every Japanese street." [Note how this paper that Kishino Junko once worked for is referred to as a right-wing newspaper!]

See: http://www.economist.com/blogs/banyan/2014/03/japans-demography

 

How about the U.S.? People here aged 65 and older now make up over 17 percent of the total population, compared with 12.4 percent in 2000 and 4.1 percent in 1900. So that would mean that the U.S., too, is very close to being considered an "Aged Society."

Another relevant statistic is the number of workers in the economy paying into Social Security to support the number of retirees which will only keep going up as the "Baby Boomers" retire. I seem to recall the statistic from when I was in college of just under 8 workers for every retiree; today there are only 2.9 workers per retiree—and this amount is expected to drop to 2 workers per retiree by 2030. Aaack!!

 

Here are some comparative numbers going back to 1970 and projecting out to 2050:

There is precious little on which I find myself able to agree with Conservative Congressional Republicans but in the fights over the Debt Ceiling and government spending in general, they are not incorrect when they say that current levels of government spending in relation to revenues is not sustainable. Obviously, if we formerly had almost 8 workers per Social Securioty recipient and now that number is droping to less than 3, maybe even only 2 workers per SS receipient, that is serious. But is cutting benefits to Social Security recipients the only or even most obvious solution?

It is a fact that "While average effective tax rates barely changed in the US from 1945 to 2015, the average tax rates of high-income households fell sharply—from about 50 percent to 25 percent for the highest income 0.01 percent and from about 40 percent to about 25 percent for the top 1 percent." (from the Tax Policy Center at https://www.taxpolicycenter.org/taxvox/effective-income-tax-rates-have-fallen-top-one-percent-world-war-ii-0)

So, several things will probably happen--indeeed, some are already happening--starting with delaying effective retirement dates and Social Secuurity and Medicare eligibility. Usually these require younger workers to add a year or two to their working lives. For example, if you were born between 1943 to 1954, full retirement was possible ast age 66. The full retirement age increases gradually if you were born from 1955 to 1960 until it reaches 67. For anyone born 1960 or later, full retirement benefits are payable at age 67.

But there is also the revenue enhancement strategy, i.e., small increases in the social security tax rates on the of the top 0.01% of income earners and an even slighter increase in that same tax rate for the top 1%. I would prefer to see that over cutting Social Security or Meicare for our senior citizens--which, of course, I am one. But in my case, I didn't retire until 7 years after my eligibility date because I has happy doing what I was doing!