Demographics do not lie. And at the moment, the study of demographics is painting a very bleak
picture for the people of Japan. Recently the Prime Minister warned that the population is falling
so fast that they are “on the brink of not being able to maintain social functions.” Fumio Kishida
said it was “now or never” when it comes to getting population growth back on track.


“In thinking of the sustainability and inclusiveness of our nation’s economy and society, we
place child–rearing support as our most important policy,” the prime minister said. Because the
birth rate is so low, Kishida is willing to double their spending on child–related programs, with a
new government agency soon to come to combat that problem.


With one of the lowest birth rates in the world, for the first time since records have been
collected in 1899, fewer than 800,000 births will be recorded in 2022. Because there are so
many older people in Japan, with one of the highest life expectancies in the world, a true
demographic crisis is brewing. Nearly one in every 1,500 people in Japan are over the age of
100. With such a rapidly aging society, and without the young people rising through the ranks,
there is a huge gap and lack of new young people to take on the myriad roles in the workforce.


So, what is the impetus for all these low demographic numbers? Why is the number of babies
being born in Japan so low? There are a few important factors at play. For one, the cost of living
in Japan is very high, which keeps people from having too many children. Secondly, there is
limited space and also lack of childcare support in many areas of the country, which makes the
process of raising children much more difficult. Of course, the pandemic has played a huge role
in this too, as many Japanese couples put off having children because of Covid–19 raging
around the globe.


The economy, as one would imagine, is a primary reason. “Japan’s economy has stalled since
its asset bubble burst in the early 1990s. The country’s GDP growth slowed from 4.9% in 1990
to 0.3% in 2019, according to the World Bank. Meanwhile, the average real annual household
income declined from 6.59 million yen ($50,600) in 1995 to 5.64 million yen ($43,300) in 2020,
according to 2021 data from the country’s Ministry of Health, Labor and Welfare.”


The government has launched various initiatives to address the population decline over the past
few decades, including new policies to enhance childcare services and improve housing
facilities for families with children. Some rural towns have even begun paying couples who live
there to have children.


Other parts of East Asia are also experiencing huge demographic shifts, such as South Korea
whose women are having an average of .79 children in their lives, rather than the 2.1 needed for
a stable population. China’s population has also gotten smaller in 2022, and they continue to
battle the pandemic as well.

According to Adnan Zai, Advisor to Berkeley Capital, “The demographics of East Asia are
changing for a variety of reasons. If these countries want to move forward, they will need to
stabilize their populations and ensure that the economy moves forward.”


With so much unrest around the globe, East Asia has been particularly hard–hit when it comes
to population growth. All eyes are on them as they attempt to solve the problem so they can
push their economy forward.