Japan – Australia: Ageing Populations – Demographic Socio Political Comparison

From ANU Australian National University’s East Asia Forum, articles on the issue of demography, ageing, electoral and social security in Japan ‘The problematic politics of Japan’s ageing electorate’ and Australia ‘Maintaining Australia’s status as an immigration nation’. 

Both nations, like elsewhere, are ageing, but dealing with campaigns opposed to immigration to ameliorate working, tax revenue and budget stress, while many retired and elderly voters have short term horizons or simply vote for their own future security.

However, as this issue continues to become significant, especially Japan, there is little political will to deal with it openly and honestly, hence, working age and younger generations will need to deal with it, while having low expectations of state social security support.  

Meanwhile in Australia, there has been two decades of nativist ‘dog whistling’ (undefined) immigration and population growth, via legacy and independent media to persuade voters, yet media and policy makers seem not to understand the demographics, immigration, population and economic effects?

While there is below replacement fertility, fewer youth, working age has passed the ‘demographic sweet spot’, more retirees and increasing old age dependency ratios, that should settle by mid century; in the meantime temporary net migration inc. international students, maintain the working age cohort, pay taxes and for services, while supporting budget health.

‘The problematic politics of Japan’s ageing electorate’

27 February 2023

Author: Yasuo Takao, Curtin University

Japan’s Prime Minister Fumio Kishida used a policy speech at the opening of the 2023 session of Japan’s parliament, the National Diet, to declare that Japan was ‘on the brink of not being able to maintain social functions’ due to the country’s population crisis. The country’s median age is 49 — the second highest in the world.

In the 2021 House of Representatives election, the median age of those who cast a vote was 59. The centre of gravity of Japanese electoral politics has shifted from taxpayers to pensioners, with the potential of the elderly exerting more political pressure over policymakers as the population ages.

The majoritarian decision-making model suggests that self-interested aging voters are likely to support increasingly generous social benefits for themselves, even at the expense of other generations.

In Japan, voter turnout has consistently been higher and is steadily increasing among older people. The age gap in Japan’s voter turnout is exceptionally high, with an OECD study finding a gap of 25 percentage points in voter turnout between voters 55 and older and voters under 35, compared with the OECD average of 12 points. Assuming that high turnout is a reflection of political interest, this implies that elderly voters influence politics in a self-interested way, to the detriment of younger generations.

But no studies have yet found clear evidence of such self-interest among Japan’s elderly voters. In the early 2000s, the Japanese public became seriously concerned about the country’s apparently unsustainable level of social security expenditure. The elderly, more than any other cohort of the population, consider social security issues to be important factors in casting their votes.

Japan’s older people may not be as explicitly self-interested as the median voter model would predict. A series of surveys conducted by Japan’s Cabinet Office and Ministry of Health, Labour and Welfare found that elderly respondents supported policy constraints on social security just as much as other age cohorts.

Internationally, the Japanese elderly are seen as more accepting of intergenerational equity than the elderly in other countries. Cross-national surveys on those 60 and older, conducted by the Cabinet Office in 2005, 2010, 2015 and 2020, asked whether government policy should prioritise younger people over older people or vice versa. Japan had the highest percentage — 31 per cent — of respondents agreeing that ‘young people should be prioritised’ —compared to 14 per cent in the United States and 17 per cent in both Germany and Sweden.

On this evidence, self-interested voters seeking to maximise their own benefits seems less applicable in the case of the Japanese welfare state. But other factors might also be at play..

The primary factor influencing public attitudes toward social security is demographic changes. In the early 2000s, the urgent need for social security reform in response to Japan’s population crisis captured public attention. The debate that followed played a significant role in influencing the attitudes of the elderly toward social security benefits.

There is undoubtedly a distinctive generational difference in political attitudes. The dankai baby boomer cohort born between 1947 and 1949 experienced turbulent events in their youth — Japan’s rapid economic growth, anti-establishment student movements, industrial pollution and the Vietnam War among them. These dankai-specific experiences bred life-long progressive political attitudes and a propensity to embrace the common good rather than sectional interests. In the 2009 general election a plurality of 49 per cent of voters aged 60–69 voted for the Democratic Party of Japan, which toppled the conservative Liberal Democratic Party.

Japan’s elderly cohort also has the highest labour-force participation among the OECD countries. Nearly half of Japanese men aged 60–70 and one quarter of those aged 70–75 are still in the workforce. About three-quarters of the Japanese elderly workforce work in non-regular positions and consider social security issues important to their votes.

Despite having less secure employment, elderly voters do not necessarily influence politics in a self-interested way to the detriment of younger generations. Employed elderly people continue to find security in belonging to a particular company, which dissuades them from organising around their own interests with others beyond their company ties. Employed elderly people are more likely to identify with the interests of their younger co-workers.

Japan’s public, mandatory long-term care insurance has had a significant impact on the elderly. The dramatic rise of the costs of its operation has undermined its fiscal stability and this universal system weakens the interest in political activism by the elderly. Eligibility is not based on income or family situation but purely on age and physical and mental health.

Anyone 65 or older, plus those aged 40–64 with aging-related diseases, are eligible for institutional or community-based care.

Self-employed individuals, of whom 40 per cent are 65 or older and have no mandatory retirement age, hold opinions aligned with the protection of their small businesses, often against the interests of elderly consumption.

The aging of the Japanese electorate may not have led to politically charged generosity for the elderly at the expense of younger generations, but there are still many puzzles to unravel about how the elderly in Japan are affecting policy choices and political outcomes.

Yasuo Takao is Adjunct Senior Research Fellow at the School of Media, Culture and Creative Arts, Curtin University, Perth.

‘Maintaining Australia’s status as an immigration nation’

20 May 2023

Authors: Stephen Clibborn and Chris F Wright, University of Sydney

Australia has been widely regarded internationally as an exemplary ‘nation of immigrants’, with migration policies that effectively serve the national interest. But since the mid-1990s, Australia’s migration system has shifted away from the long-term provision of skills for nation-building towards a guest worker model aimed at satisfying the short-term demands of business.

The current migration system inefficiently supplies skills, exposes temporary migrants to underpayment and mistreatment and poorly serves the national interest. It has disintegrated to a point where the recent Parkinson Review of the Migration System and Home Affairs Minister Clare O’Neil declared it ‘broken’ and in need of an overhaul.

The Parkinson Review identified three general principles to return to a sound migration system: tripartite involvement of unions and employer associations with government in designing and implementing policy, universality of regulation for migrants and mobility for migrants to transfer between employers. The government announced it will now undertake a major reform of the migration system using input from the Parkinson Review.

The government’s single concrete immediate policy announcement in response to the review was increasing the Temporary Skilled Migration Income Threshold (TSMIT), which was justified on grounds that it would help reduce exploitation of workers. This policy increases the effective minimum pay rate for some classes of migrant workers from AU$53,900, where it has languished since 2013, to AU$70,000. That means employers sponsoring temporary migrant workers under the Temporary Skill Shortage scheme from 1 July 2023 must pay a minimum annual salary of AU$70,000. This is a compromise between recommendations from business groups — AU$63,000 — and the Australian Council of Trade Unions — AU$90,000.

The government has stated that simplifying the migration system, delivering skills needed by business and reducing exploitation of migrant workers are its main priorities. Many of the Parkinson Review’s recommendations will help achieve these goals. Recommendations such as removing restrictions on temporary skilled migrants’ mobility between employers and independent assessment of skills demand are helpful. But other recommendations potentially undermine them, such as continued reliance on the TSMIT and creating three tiers of temporary labour migration. This may further complicate the system, reduce labour supply and maintain exploitation.

Historical and comparative research suggests that the government’s goals can be best achieved by strengthening ties between migration and employment regulations. Many problems with the migration system can be traced back to the expansion of temporary visas in 1996. Prior to this, the migration system was relatively simple. It supplied skills to business efficiently and migrant worker exploitation was lower. Complementary migration and employment regulations contributed to these outcomes.

Three changes would better align migration and employment regulations.

First, abandon the TSMIT pay threshold. Minister O’Neil’s headline policy announcement — raising the TSMIT — places excessive faith in salary level as a measure of skill and worker power. The Parkinson Review’s recommendation to build a three-tier system of employment regulation around salary levels does likewise on the basis that those workers paid above the TSMIT are likely to be at limited risk of exploitation. The policy focus should not be on the level of the threshold but its very existence.

For many years, Australia’s Minister for Home Affairs has had the power to set the TSMIT, resulting in pay rates being determined by political considerations rather than labour market assessments. This contrasts with the methodical and transparent way the Fair Work Commission’s Expert Panels set minimum wages.

Maintaining the TSMIT risks reinforcing separate labour markets for migrants and citizens, undermining the government’s objectives. An increased TSMIT could also price out some skilled jobs in sectors with pronounced labour demand, such as health, social care and hospitality. This would likely generate political pressure for new job-specific visas to address Australia’s skill needs, further complicating the migration system.

Second, independently assess skills needs. The Parkinson Review recommended using Jobs and Skills Australia, a new Commonwealth agency, to better align migration and labour market regulations. This agency will help to ensure migration better complements the education and training system. For decades these policy areas have been at cross-purposes, despite their mutual objectives of supplying necessary skills.

Using Jobs and Skills Australia to strengthen coordination between migration, on one hand, and education and training, on the other, will help ensure skills and workforce needs are assessed and addressed more reliably. This approach will give employers more confidence to invest in developing their workforces.

Third, enforce employment regulations more effectively. Without this, unscrupulous employers will continue to underpay and mistreat vulnerable temporary migrants, gaining a competitive advantage over honest operators. Without effective enforcement, businesses are discouraged from seeking to succeed through quality, innovation and productivity improvements, which are essential for Australia’s international competitiveness. The assumption that a certain level of pay in the TSMIT and a proposed higher-paid visa tier equates to individual worker power to resist underpayment is misplaced.

In implementing the Parkinson Review’s recommendations, the government must ensure migration regulations are better integrated with wider employment regulations. This will help achieve the government’s triple goals of simplifying the system, supplying skills more effectively and reducing worker exploitation. This will ensure the migration system continues to support Australia’s international standing as a successful ‘nation of immigrants’.

Stephen Clibborn is an Associate Professor and Co-Director of the Sydney Employment Relations Research Group at the University of Sydney Business School, University of Sydney.

Chris F Wright is an Associate Professor and Co-Director of the Sydney Employment Relations Research Group at the University of Sydney Business School, University of Sydney.

For related links and article on Ageing Democracy, Australian Immigration News, Demography, Government Budgets, Pensions, Taxation and Younger Generations click through:

Population Pyramids, Economics, Ageing, Pensions, Demography and Misunderstanding Data Sets

Australian Migration Review 2023 – For Immigrants and Nation or a Nativist Trap?

Global Population Decline and Impacts

Population Decline in Asia is Near with Africa to Follow

Population Decline and Effects on Taxation, Benefits, Economy and Society

Grey Tsunami – Electoral Demographics – Ageing Populations vs. Youth

Ageing Democracy, Nativism and Populism

University versus Vocational Careers & Financial Outcomes

Interesting article from NPR US on how many high paying vocational or trade jobs are vacant due to deference towards higher education, college or university, but often uncertain employment outcomes and lower salaries from the latter?

Why? Too many middle class see university as a path to upward mobility, but may indicate that some occupations guarantee employment and high salaries whether vocational or university? 

Conversely, many university or college graduates struggle to find related employment and reasonable salaries versus many trade or vocational occupations, in demand.  Meanwhile many developed nations have unskilled and skilled worker shortages made worse by ageing and decline in the working age population that has passed the ‘demographic sweet spot’, but compounded further by many deferring to higher education.

From NPR National Public Radio:

High-paying jobs that don’t need a college degree? Thousands of them sit empty

Like most other American high school students, Garret Morgan had it drummed into him constantly: Go to college. Get a bachelor’s degree.

“All through my life it was, ‘If you don’t go to college you’re going to end up on the streets,’ ” Morgan said back in 2018. “Everybody’s so gung-ho about going to college.”

So he tried it for a while. Then he quit and started training as an ironworker, which is what he was doing on a weekday morning in a nondescript high-ceilinged building with a concrete floor in an industrial park near the Seattle-Tacoma International Airport.

Morgan and several other men and women were dressed in work boots and hard hats, clipped to safety harnesses with heavy wrenches hanging from their belts. They were being timed as they wrestled 600-pound I-beams into place.

Back then, the demand for ironworkers was rising – and it still is: the sector is growing 4% annually, according to the Bureau of Labor Statistics. Ironworkers earn, on average, $27.48 per hour, or $57,160 per year. Morgan was already working on a job site when he wasn’t at the Pacific Northwest Ironworkers shop. At 20, he was earning $28.36 an hour, plus benefits.

Five years later, he’s on the job full time, working “six-10s” — industry lingo for 10 hours a day, six days a week. He helped build the Rainier Square Tower in Seattle and a data center for Microsoft. “I’m loving it every day,” he said. “It was absolutely the right choice.

As for his friends from high school? “Someday maybe they’ll make as much as me.”

Raising alarms

While a shortage of workers pushes wages higher in the skilled trades, the financial return from a bachelor’s degree is softening, even as the price, and the average debt into which it plunges students, remain high.

But high school graduates have been so effectively encouraged to get a bachelor’s that high-paid jobs requiring shorter and less expensive training are going unfilled. This affects those students and also poses a real threat to the economy.

“Parents want success for their kids,” Mike Clifton, who taught machining for more than two decades at the Lake Washington Institute of Technology before retiring, said in 2018. “They get stuck on [four-year bachelor’s degrees], and they’re not seeing the shortage there is in tradespeople until they hire a plumber and have to write a check.”

The Washington State Auditor found in 2017 that good jobs in the skilled trades were going begging because students are being almost universally steered to bachelor’s degrees. Recent labor statistics suggest that’s still the case – in Washington State and around the country.

President Biden, in his State of the Union address this month, spoke of “jobs paying an average of $130,000 a year, and many do not require a college degree.”

Among other things, the Washington auditor recommended that career guidance — including choices that require less than four years in college — start as early as the seventh grade.

“There is an emphasis on the four-year university track” in high schools, Chris Cortines, who co-authored the report, said after it was issued. Yet, nationwide, nearly three out of 10 high school grads who go to four-year public universities haven’t earned degrees within six years, the most recent figures from the National Student Clearinghouse show. At four-year private colleges, that number is nearly one in five.

“Being more aware of other types of options may be exactly what they need,” Cortines said. In spite of a perception that college “is the sole path for everybody,” he said, “when you look at the types of wages that apprenticeships and other career areas pay, and the fact that you do not pay four years of tuition and you’re paid while you learn, these other paths really need some additional consideration.”

And it’s not just in Washington state.

Today, nearly 90% of construction companies nationwide are having trouble finding qualified workers, according to the Associated General Contractors of America; in Washington, the proportion is 88%. Ironworkers remain in particularly short supply, along with drywall installers and sheet metal workers.

The $1.2 trillion federal infrastructure plan – Biden’s signature legislation passed by Congress in 2021 – will create 1.5 million construction jobs per year for the next 10 years, the White House says, boosting the share of all jobs that are connected with rebuilding the nation’s infrastructure from 11% to 14%, according to the Georgetown University Center on Education and the Workforce. Median wages for construction jobs are higher than the median pay for all jobs, the Bureau of Labor Statistics reports.

“The economy is definitely pushing this issue to the forefront,” Amy Morrison Goings, president of the Lake Washington Institute of Technology, which educates students in these fields, said in 2018. “There isn’t a day that goes by that a business doesn’t contact the college and ask the faculty, ‘who’s ready to go to work?’ “

In all, some 30 million jobs in the United States that pay an average of $55,000 per year don’t require bachelor’s degrees, according to the Georgetown Center on Education and the Workforce.

Yet the march to bachelor’s degrees continues. And while people who get them are more likely to be employed and make more money than those who don’t, that premium appears to be softening; their inflation-adjusted median earnings were lower in 2018, the most recent year for which the figure is available, than in 2010.

“There’s that perception of the bachelor’s degree being the American dream, the best bang for your buck,” said Kate Blosveren Kreamer, deputy executive director of Advance CTE, an association of state officials who work in career and technical education. “The challenge is that in many cases it’s become the fallback. People are going to college without a plan, without a career in mind, because the mindset in high school is just, ‘Go to college.’ “

It’s not that finding a job in the trades, or even manufacturing, means needing no education after high school. Most regulators and employers require certificates, certifications or associate degrees. But those cost less and take less time than earning a bachelor’s degree.

Tuition and fees for in-state students to attend a community or technical college in Washington State, for example, came to less than half the cost last year of a four-year public university, and less than a fifth of the price of attending the cheapest private four-year college.

Washington is not the only state nudging students into education for the trades. At least 39 states have taken steps to encourage career and technical education, and many have increased funding for it, a 2017 Brookings Institution review found.

At the federal level, legislation introduced in Congress in January would make some short-term workforce programs eligible for federal Pell Grants. “For too long, the college-for-all mentality drove Americans toward expensive and often ineffective education pathways,” its sponsors said. “As our country stares down a historic worker shortage, fewer Americans are getting the skills they need to be successful.”

The branding issue

Money isn’t the only issue, advocates for career and technical education say. An even bigger challenge is convincing parents that it leads to good jobs.

“They remember ‘voc-ed’ from when they were in high school, which is not necessarily what they aspire to for their own kids,” Kreamer said. Added Kairie Pierce, apprenticeship and college director for the Washington State Labor Council of the AFL-CIO: “It sort of has this connotation of being a dirty job. ‘It’s hard work — I want something better for my son or daughter.’ “

The Lake Washington Institute of Technology, about 20 miles from Seattle, changed its name from Lake Washington Technical College, said Goings, its president, to avoid being stereotyped as a vocational school.

These perceptions fuel the worry that, if students are urged as early as the seventh grade to consider the trades, then low-income, first-generation students, and students of color will be channeled into blue-collar jobs while wealthier and white classmates are pushed by their parents to get bachelor’s degrees.

“When CTE was vocational education, part of the reason we had a real disinvestment from the system was because we were tracking low-income and minority kids into these pathways,” Kreamer said. “There is this tension between, do you want to focus on the people who would get the most benefit from these programs, and — is that tracking?”

In a quest for prestige and rankings, and to bolster real-estate values, high schools also like to emphasize the number of their graduates who go on to four-year colleges and universities.

Jessica Bruce enrolled in community college after high school for one main reason: because she was recruited to play fast-pitch softball. “I was still trying to figure out what I wanted to do with my life,” she said.

But she “couldn’t quite figure it out,” she says today. She was an apprentice ironworker in 2018, making $32.42 an hour, or more than $60,000 a year, while continuing her training. At 5-foot-2, “I can run with the big boys,” she said at the time, laughing.

Five years later, now 46, she’s starting a job installing 500 tons of rebar for a Boeing hangar near Seattle, working mostly outside, which she likes. She’s also back in school, of sorts, taking online courses to get her certification to become a fitness instructor as a side gig. And she’s bought a Harley.

Bruce says she has “absolutely no regrets,” herself. As for her own daughter, who’s 15, “if it’s college then it’s college,” she says. “I fully support that.” But students now in high school “are becoming maybe a little bit more aware” of the potential for making good money in the trades, she added. “I know my daughter is aware. I’ve told her there’s every kind of trade out there.”

The original 2018 version of this story was co-reported with Ashley Gross of KNKX.

For related blogs and articles on adult learning, career guidance, demography, economics, industry based training, VET vocational education & training and younger generations click through:

University Higher Education or VET Vocational Training?

Soft Skills for Work and Employment

Study Advice for Starting University

University Graduate Employment