Shinzo Abe, Japan’s prime minister, wants to raise the nation’s retirement age past 65 to help surmount the economics of its declining population and a growing debt bubble.
“In the next three years,” Abe said in an interview with Nikkei Asian Review Monday, “I intend to overhaul the social security system to give peace of mind to everyone—children, parents, active workers, and senior citizens.”
He said the increase in working careers would help economic growth, tax revenue, and more social security premium receipts. He also argued that if people chose to work past age 70, they would receive more money when they collect their retirement benefits.
Over the coming three years, Abe said he would devote significant attention to labor issues. The next two would see the prime minister focus on Japan’s pension and medical care problems. “Private consumption will be stimulated if working generations have less anxiety about their futures,” he said.
In recent years, Japan has been plagued with a shrinking number of births combined with a rapidly aging population. The population is dropping by about 300,000 per year, according to worldometers.info, and is expected to fall further. The country also has a high life expectancy, averaging out at 85.5 years, the second-highest in the world, according to Geoba.se.
That means a lot of pension payments, and not enough workers to pick up the slack.
Abe is six years into his second term as prime minister, and could become Japan’s longest-serving prime minister if elected for a third three-year term. He is currently competing against Shigeru Ishiba, a former defense minister, in a ruling party leadership contest on September 20. Abe represents the conservative Liberal Democratic Party, which he led to five consecutive national election victories that were followed by economic growth and a stock market boom.
Part of that growth has seen more women working as well as a spike in employees over 65 (to 23.5% from 19.9%). The prime minister also said he would find a way to soften the impact of Japan’s planned consumption tax hike for October 2019, to 10% from 8%, with “bold countermeasures.”
Abe was also dismissive of US trade policy. He said that the US and Japan share “a broader goal of expanding bilateral trade and investment for the benefit of both countries and achieving a free and open Indo-Pacific based on fair trade.”
Tags: Japan, Pension, Retirement Age, Shinzo Abe