Demographics sour, not sweet

All due respect to Jesper Koll in his opinion piece in the Oct. 2 edition ("Japan's demographic sweet spot"), but I found that his logic and evidence fail in substantiating his claim that Japan's demographics are in a "sweet spot."

Essentially, he argued the graying population and sub-levels of the replacement rate do not matter as much as experts warn, an increase in full-time employment is positively building a new middle class and more money and credit in the hands of full-timers will stimulate the economy. Not so fast my friend!

Koll reasons that demographics is math, not economics. Sure enough, but economics is employment and employment is demographics. The employment rate is rising, but the labor pool is drained. There are more jobs available than Japanese can fill. In my opinion, the new middle class will be born out of more open immigration.

Koll talks about the rates of people re-entering the job market and more part-timers moving to full time.

But who are these people? It matters because I reckon the demographics will show they are largely retirees and women. Why are they re-entering? It matters as a measure of confidence; they are worried their pensions will not last and need cash coming home. What jobs are they taking? It matters because of productivity in the overall economy. It all adds up to money illusion, which matters in inflation.

What's more, the irony of using a photo with a clear majority of female graduates attending a job fair in this article was not lost on me. I expected to read a story regarding positive female employment in Japan.

Lastly, with people continuing to move into Japan's mega-cities, no purchases on big-ticket items like homes and cars are going to organically stimulate this economy. Don't these demographics leave a sour taste?

The opinions expressed in this letter to the editor are the writer's own and do not necessarily reflect the policies of The Japan Times.