On Sept. 21, while in New York for U.N. meetings, Prime Minister Shinzo Abe was quoted as saying "I have absolutely no worries about Japan's demography" arguing instead that "Japan may be aging. Japan may be losing its population. But these are incentives for us."

Despite this optimistic viewpoint, the facts about Japan's demographics and their impact on the economy are clear. According to the Committee for Japan's Future, a government task force, Japan's total labor force will decline to 55 million by 2060, even with the elderly working to age 70. Furthermore, the National Institute of Population and Social Security Research in Japan projects that an elderly population that teeters on 40 percent of the total population will heavily burden the remaining workforce. These labor shortages will result in decreased economic dynamism, a smaller tax base and emasculate Japan's ability to promote its national interests both domestically and internationally.

Currently, Japan's labor shortages are not being felt equally across the economy. Labor shortages are more acutely experienced in particular sectors such as construction, transportation, commerce and the services sector for several reasons. First, these sectors are characterized as blue collar or kitsui, kitanai and kiken (difficult, dirty and dangerous) and have been unattractive to university graduates since at least the 1980s. Second, these jobs are by-and-large low paid and subject to irregular hours compared to full-time, white-collar jobs. Third, in concert with a declining number of new graduates entering the workforce, and a relative improvement of the Japanese economy for middle class workers, the unemployment rate has dropped to 3 percent.