Japan's population is aging(see Demographics of Japan). During the 1950s, the percentage of the population in the sixty-five-and-over group remained steady at around 5%. Throughout subsequent decades, however, that age group expanded, and by 1989 it had grown to 11.6% of the population. It was expected to reach 16.9% by 2000 and almost 25.2% by 2020. Perhaps the most outstanding feature of this trend was the speed with which it was occurring in comparison to trends in other industrialized nations. In the United States, expansion of the sixty-five-and-over age-group from 7% to 14% took seventy-five years; in Britain and the Federal Republic of Germany (West Germany), this expansion took forty-five years. The same expansion in Japan was expected to take only twenty-six years.
A key principle in the stratification of Japanese society is age. "Acting one's age" may be more important in Japan than in some other societies, resulting in relatively narrow age-ranges for such life cycle-events as university education, first job, or marriage. This pattern fits with the value placed on playing social roles appropriately.
Old age ideally represents a time of relaxation of social obligations, assisting with the family farm or business without carrying the main responsibility, socializing, and receiving respectful care from family and esteem from the community. In the late 1980s, high (although declining) rates of suicide among older people and the continued existence of temples where one could pray for quick death indicated that this ideal was not always fulfilled. Japan has a national holiday called Respect for the Aged Day, but for most people it is merely another day for picnics or an occasion when the commuter trains run on holiday schedules. True respect for the elderly may be questioned when buses and trains carry signs above specially reserved seats to remind people to give up their seats for elderly riders. Although the elderly might not have been accorded generalized respect based on age, many older Japanese continued to live full lives that included gainful employment and close relationships with adult children.
Although the standard retirement age in Japan throughout most of the postwar period was fifty-five, people aged sixty-five and over in Japan were more likely to work than in any other developed country in the 1980s. In 1987 about 36% of men and 15% of women in this age-group were in the labor force. With better pension benefits and decreased opportunities for agricultural or other self-employed work, however, labor force participation by the elderly has been decreasing since 1960. In 1986 about 90% of Japanese surveyed said that they wished to continue working after age sixty-five. They indicated both financial and health reasons for this choice. Other factors, such as a strong work ethic and the centering of men's social ties around the workplace, may also be relevant. Employment was not always available, however, and men and women who worked after retirement usually took substantial cuts in salary and prestige. Between 1981 and 1986, the proportion of people sixty and over who reported that a public pension was their major source of income increased from 35% to 53%, while those relying most on earnings for income fell from 31 to 25% and those relying on children decreased from 16 to 9%.
In the 1980s, there was a major trend toward the elderly maintaining separate households rather than co-residing with the families of adult children. The proportion living with children decreased from 77% in 1970 to 65% in 1985, although this rate was still much higher than in other industrialized countries. The number of elderly living in Japan's retirement or nursing homes also increased from around 75,000 in 1970 to more than 216,000 in 1987.
But still, this group was a small portion of the total elderly population. People living alone or only with spouses constituted 32% of the sixty-five-and-over group. Less than half of those responding to a government survey believed that it was the duty of the eldest son to care for parents, but 63% replied that it was natural for children to take care of their elderly parents. The motive of co-residence seems to have changed, from being the expected arrangement of an agricultural society to being an option for coping with circumstances such as illness or widowhood in a postindustrial society.
The health of the aged receives the society's a great deal of attention. Responsibility for the care of the aged, bedridden, or senile, however, still devolves mainly on family members, usually daughters-in-law.
As Japan's population aged, so did its workforce. In 1990 about 20% of the work force was made up of workers aged fifty-five and over. The Ministry of Labor predicted that by 2000 about 24% of the working population (almost one in four workers) would be in this age-group. This demographic shift brings about both macroeconomic and microeconomic problems. At the national level, Japan is having trouble financing the pension system, and the future of the pension system is a major topic in the 2005 House of Representatives election. At the corporate level, problems include growing personnel costs and the shortage of senior positions.
In most Japanese companies, salaries rise with worker age. Because younger workers are paid less, they are more attractive to employers, and the difficulty in finding employment increases with age. This pattern is evidenced by the unemployment rates for different age-groups and by the number of applicants per job vacancy for each age-group in openings handled by public employment offices. As the Japanese population ages, such trends may grow.
Most Japanese companies require that employees retire upon reaching a specified age. During most of the postwar period, that age was fifty-five. Because government social security payments normally begins at age sixty, workers are forced to find reemployment to fill the five-year gap. However, in 1986 the Diet passed the Law Concerning the Stabilization of Employment for Elderly People to provide various incentives for firms to raise their retirement age to sixty. Many Japanese companies raised the retirement age they had set, partly in response to this legislation. And despite mandatory retirement policies, many Japanese companies allow their employees to continue working beyond the age of sixty--although generally at reduced wages. People over sixty continue to work varied: to supplement inadequate pension incomes, to give meaning to their lives, or to keep in touch with society.
As Japan's population ages, the financial health of the public pension plan deteriorates. To avoid massive increases in premiums, the government reformed the system in 1986 by cutting benefit levels and raising the plan's specified age at which benefits began from sixty to sixty-five. Under the revised system, contributions paid in equal share by employer and employee were expected to be equivalent to about 30% of wages, as opposed to 40% of wages under the old system. However, problems now arose in securing employment opportunities for the sixty-to-sixty-five agegroup.
In 1990 some 90% of companies paid retirement benefits to their employees in the form of lump-sum payments and pensions. Some companies based the payment amount on the employee's base pay, while others used formulas independent of base pay. Because the system was designed to reward long service, payment rose progressively with the number of years worked.