Commentary by William Pesek
Dec. 5 (Bloomberg) -- Jim Rogers probably didn’t set out to make 500 bankers blush at a recent conference in Seoul. The well- known investor did just that when he encouraged South Koreans to have more babies.
“Anyone who hasn’t done it, I urge you to get home and get on with it” said Rogers, chairman of Singapore-based Rogers Holdings, who co-founded the Quantum Fund with George Soros in the 1970s. He joked that folks should take a day off, if necessary.
Urging Koreans to procreate is about more than Rogers’s love of parenthood: Korea needs to increase its birth rate for the sake of the economy. So do Japan and other key Asian nations, he said.
South Korea’s birth rate (1.2 children per couple) is the second lowest in the world after Hong Kong, according to a recent United Nations report. Hong Kong, South Korea and Japan all have lower birth rates than North Korea.
Such demographic trends are a widening crack in Asia’s potential. Nowhere is this issue more acute than in Japan. And if Rogers made Koreans blush, he annoyed some Japanese in 2006 when he said: “If the current birth rate, which is the lowest in the major developed countries, continues, there will be no Japanese. Who will pay the enormous debt?”
That question, demographically minded investors like Rogers will be happy to hear, is suddenly getting more traction in Tokyo. Keidanren, Japan’s biggest business organization, is urging its 1,632 member companies to encourage employees to have more sex.
More Than Feelings
Just how creepy that sounds was summed up yesterday in a Japan Times cartoon. It depicted a couple lying in bed, lamenting the dark-suit-wearing Keidanren official underneath singing: “Feelings. Nothing more than feelings ...”
Yet working too much is, according to surveys, why many Japanese don’t have more sex and, by extension, babies. A recent survey by condom maker Durex found that Japanese couples have sex 45 times a year, less than half the global average of 103 times.
Japan’s birth rate has been falling since 1972, and in five years, people over age 65 will outnumber children by two-to-one. Add an aversion to increased immigration and Japan is looking at a future without enough labor. So, Keidanren wants workers to have more time off to, well, be together.
That’s all well and good, but Japan needs to do much more. Here’s an idea: Why not effectively pay families to have more kids?
Worsening Recession
Keidanren does have a point. Japan is a place where vacation days often go unused and the vocabulary includes a word for death from over-work -- “karoshi.” Things will get worse as the global crisis and Japan’s recession deepen.
Toyota Motor Corp. will cut half its 6,000 temporary workers by the end of March. As more major companies shed “non-regular” workers, full-time staff will be under greater pressure to produce more.
If this really is the worst global slump since the 1930s, companies also will be under pressure to trim the ranks of the “salaryman,” that fabled overworked corporate apparatchik. The notion that employees worried about their jobs will voluntarily leave the office for family time is a reach.
Some companies are pushing the issue. A recent article by Bloomberg News reporter Megumi Yamanaka said that Nippon Oil Corp., Japan’s largest refiner, is forbidding staff to work on weekends. Workers also must get permission to stay past 7 p.m. Textile maker Toray Industries Inc. and All Nippon Airways Co. are holding “family weeks.”
Cost Issue
Japan’s demographic problems are far bigger than politicians realize.
Sexism is part of this story. Because Japan isn’t geared toward women having both a career and a family, many delay child birth. Improving Japan’s daycare infrastructure alone might increase the number of babies born each year. Politicians should demand that companies offer women more flexible work schedules.
Yet cost may be the key problem. A 2006 study by the Cabinet Office found that it costs about 23.7 million yen ($255,000) to raise a child to age 18. And that’s probably a conservative estimate. Still wondering why the number of two- or three-child Japanese families is dwindling?
Japan should offer far bigger tax incentives for having children, particularly for families that have more than two. France, for example, has done just that. Japan should consider generous subsidies for education and daycare as well.
The Health, Labor and Welfare Ministry is increasing aid temporarily for small- and medium-sized enterprises subsidizing employees who hire a babysitter or use non-government-authorized nursery schools, according to the Daily Yomiuri. It’s a good idea, but Japan needs to think bigger and throw some serious money at the problem.
Spend It Now
An obvious counterargument is how to pay for all this. With the largest debt among developed nations, Japan has less cash to spare. Yet as the population shrinks, there will be less tax revenue to pay for everything else in the years ahead. Money spent now will save it later.
Nothing less than Japan’s future is at stake. As more investors such as Rogers realize it, concerns about demographics in the long run will undermine growth in the short run. That won’t help put anyone in the mood.
(William Pesek is a Bloomberg News columnist. The opinions expressed are his own.)
To contact the writer of this column: William Pesek in Tokyo at wpesek@bloomberg.net
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