Young Japanese, aware that the pension system is stacked against them, are dropping out:
While many nations have aging populations, Japan’s demographic crisis is truly dire, with forecasts showing that 40 percent of the population will be 65 and over by 2055. Some of the consequences have been long foreseen, like deflation: as more Japanese retire and live off their savings, they spend less, further depressing Japan’s anemic levels of domestic consumption. But a less anticipated outcome has been the appearance of generational inequalities.
These disparities manifest themselves in many ways. As Mr. Horie discovered, there are corporations that hire all too many young people for low-paying, dead-end jobs — in effect, forcing them to shoulder the costs of preserving cushier jobs for older employees. Others point to an underfinanced pension system so skewed in favor of older Japanese that many younger workers simply refuse to pay; a “silver democracy” that spends far more on the elderly than on education and child care — an issue that is familiar to Americans; and outdated hiring practices that have created a new “lost generation” of disenfranchised youth.
The result is that young Japanese are fleeing the program in droves: half of workers below the age of 35 now fail to make their legally mandated payments, even though that means they must face the future with no pension at all.Which makes the shortfall in the pension system even worse. This, unfortunately, is the kind of problem that democracies are bad at handling. The elderly are reliable voters, and they are only asking for the things that were promised to them all their working lives. So this will continue to be a huge challenge for the Japanese, and a major drain on their economic future.