If Japan wants to alleviate its worsening labor shortage, it may need its citizens to put off retirement and work until they are 80, according to some economists.
“People in Japan have long, healthy lives, and laws and company policies in the country have not kept up in terms of making use of their longevity,” Florian Kohlbacher, an adjunct professor at Temple University’s Tokyo campus, told Bloomberg News.
“Age 60 is still very, very young in Japan. If you want to tackle this issue you can’t just have people work longer, you need to rethink the whole HR system in Japan,” said Kohlbacher, who is also director of the Economist Corporate Network for North Asia.
Although Japan has the world’s oldest population, the country does an inadequate job of employing healthy seniors, economists say.
Company policies, work culture and a history of rigid seniority rules that work against older employees have led to fewer people working in their senior years.
Japan has about 33 million people aged 65 and above, representing more than a quarter of the nation’s population.
With the world’s longest life expectancy and a low birth rate, the working-age population is shrinking.
The worker number is projected to decline to 56 million in 2030 from 64 million in 2014, according to the report.
To alleviate the labor shortage, the country needs to come up with more innovative policies to pull seniors into the workforce.
Though some firms have introduced merit-based pay, moving away from a seniority system, age remains an important factor and the career ladder ends for many employees at 60 or before, the report noted.
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