Japan's birth rate rises - barely
By Hisane Masaki

TOKYO - Japan saw its abysmally low fertility rate rise - from a low of 1.26 in 2005 - to 1.32 in 2006. It was the first uptick in six years, providing a glimmer of hope for a nation whose population is graying at a pace probably unprecedented in history. The fertility rate is the average number of babies a woman bears during her lifetime.

But the question is whether - and for how long - the recovery in the nation's birth rate, which is among the lowest in the world, will last. In fact, it appears likely to be short-lived. If that's the case, the world's currently second-biggest economy will continue to be plagued by various woes, including the already creaking social-security system and a possible erosion of the economy's international competitiveness, as the working-age population thins out.

The 2006 figure was the highest since 2000, which posted a slight increase due to "millennium babies". Japan's total fertility rate stood at 1.33 in 2001, 1.32 in 2002 and 1.29 in both 2003 and 2004. By prefecture, the fertility rate was highest in Okinawa at 1.74 and lowest in Tokyo at 1.02.

Japan's population also grew in 2006 by 8,174 after declining for the first time since the end of World War II in 2005. The number of births in 2006 increased by 30,132 from 2005 to 1,092,662, while the number of deaths exceeded the 1 million level for four years in a row, rising to 1,084,488, the highest number since 1947.

The Ministry of Health, Labor and Welfare attributed the rise primarily to the improved employment situation amid an economic recovery, which encouraged more people to get married and have babies. In fact, the number of marriages increased for the first time in five years in 2006, with a total of 730,973 couples tying the knot, 16,708 more than in the previous year.

Last September, Princess Kiko, wife of Emperor Akihito's second son, Prince Akishino, gave birth to the first male heir to the imperial throne in four decades, saving the royal family from a succession crisis. The nationally celebrated birth may also have encouraged some Japanese women to have babies, at least temporarily.

It is still premature, however, to conclude that the low-birth-rate trend has finally bottomed out. Some experts point out that the 2006 rate rise was partly a reaction to very low levels of rates in the previous few years, during which some women just delayed giving birth. The Ministry of Health, Labor and Welfare itself cautioned against optimism. "The long-term trend of a decreasing population of children remains unchanged,'' the ministry said.

It is also widely believed that the "second baby-boomers" born in the early 1970s have made primary contributions to a recent increase in marriages and births. These people of child-bearing age will decline in number in the coming years. By age bracket, those aged between 30 and 34 accounted for 40% of the increase in the number of marriages in 2006. The women of that age group also gave birth to most babies in 2006, delivering about 420,000 children, up 3.2% from the previous year.

More important, the number of women aged between 15 and 49 is expected to shrink sharply, from about 27 million at present to about 24 million in 15 years' time. This makes it very likely that even if the nation's birth rate rises somewhat, the number of births will decline.

Japan's population now stands at about 127 million. A minimum fertility rate of 2.07 is said to be needed if Japan is to avoid a population decline, but the actual rate has been lower than that minimum necessary replacement level since 1973. The rate dropped to about 1.5 in the early 1990s and then below 1.3 in 2003.

Japan's birth rate is among the lowest in the world. The rate was 2.05 in the United States in 2005 and 2.01 in France in 2006. The rate was 1.36 in Germany, 1.33 in Italy and 1.75 in Sweden, all in 2004, and 1.71 in the United Kingdom in 2003. Among countries with lower birth rates than Japan is South Korea, where the rate stood at 1.13 on a preliminary basis in 2006.

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In a report released on May 29, the National Institute of Population and Social Security Research predicted that almost half of Japan's 47 prefectures will see their populations fall by more than 20% over the three decades from 2005. Tokyo and Okinawa are the only prefectures that are expected to see their populations rise during that period, the report said. With job seekers flocking to the capital, Tokyo is expected to account for 11.5% of Japan's total population in 2035, up from 9.8% in 2005, the report said.

Japan is at a historic juncture demographically, with the rapid aging of the population. Its birth rates had precipitously declined on an annual basis until making a recovery last year. Even before the population showed its first decline since the end of World War II in 2005, two years earlier than widely expected, the working-age population had already begun to shrink several years earlier. The percentage of people aged 65 or over has exceeded 20% of the total population, while that of children aged 14 or under has declined below 14%.

Not only is Japan's birth rate already among the lowest in the industrialized world, but its pace of decline, until bouncing back last year, was the fastest. This has been largely attributed by experts to such factors as employment insecurity, long working hours and poor public aid for child-rearing.

Economic factors are most often cited as the primary reason more and more Japanese get married in later life or choose - or are even forced to choose - to remain single. Working women in particular need or want to work, but it is not easy to combine employment and child-rearing because of the poor quality of child-care services available, unfavorable employment practices, and rigid working conditions.

To be sure, the number of marriages increased for the first time in five years in 2006. But no basic change can be seen in the trends of late marriages and births. The Ministry of Health, Labor and Welfare's report, released on Wednesday, showed that the average age at first marriage in 2006 was 30 for husbands and 28.2 for wives, both up 0.2 from 2005 and the highest on record.

The government white paper on the labor market, released last August, said that the steady increase in low-wage, part-time workers and those in temporary jobs is contributing to the low birth rate as people become reluctant to marry because ofinancial insecurity. The annual report acknowledged for the first time that the changing employment system is behind the widening income gap.

The report cited a poll showing 59% of the men in their early 30s who are on regular payrolls are married, compared with only 30% of their counterparts with part-time or temporary jobs. People not on regular payrolls may be more hesitant to wed because their income is relatively low, the paper said.

In recent years, Japanese firms have changed their employment systems to hire more part-time workers, to give themselves more freedom to adjust their operations and cut personnel costs and thereby help them recover their competitive edge in the global business environment. But the change in the employment system has created an income gap between regular and non-regular workers.

To be sure, some Japanese companies, especially in the retail and distribution industries, have recently begun to upgrade more of their non-regular employees to regular status. UNIQLO, Japan's leading specialty-clothing retail chain, for example, announced in March that it will make 5,000 of its 6,000 part-time and contract workers regular employees within two years.

Canon, the leading digital-camera, copier and printer maker, also announced in March that it will make 1,000 of its 13,000 dispatched workers at its group factories regular employees by the end of 2008. But non-regular workers still account for more than 30% of the nation's total workforce.

Critics say a series of measures taken - and highly publicized - by the Japanese government in the past decade or so to reverse the declining trend of birth rates have been almost useless, if not a complete failure. Among those measures are the Angel Plan, introduced in 1994, and the New Angel Plan, introduced in 1999. Under those plans, wide-ranging programs were implemented to encourage people to have children.

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Critics even claim that the government has not been serious enough about the problem, citing the fact that 70% of the social-welfare budget goes to programs for the aged, such as pensions and medical services, with only about 4% set aside for services for children, such as child benefits and child-care services. The government's education-related spending is also the lowest among industrialized countries in terms of its ratio to gross domestic product (GDP).

Japanese have become increasingly concerned about the future as social-security costs, such as pension contributions and insurance premiums for medical care and nursing care for the elderly, as well as tax burdens, are expected to keep rising sharply amid the anticipated long-term declining trend of birth rates and the rapid graying of society. While having to pay more pension premiums today, current Japanese workers also face the prospect of reduced pension benefits after retirement. In addition, more and more Japanese, including the elderly, are living alone.

The rapid demographic changes have alarmed Japanese policymakers. In addition to a further shrinkage in the working-age population, the decline and rapid graying of the population are matters of deep concern because they will ultimately mean lower consumer spending as well as a drop in the savings rate. All of this poses a serious potential threat to the growth potential and future competitiveness of what is currently the world's second-largest economy. Meanwhile, pressure is also growing, especially from domestic industries, to accept more unskilled foreign workers to alleviate an anticipated serious labor shortage.

A growing number of Japanese firms are improving their child- and elderly-parent-care programs, driven not only by concerns about a possible labor shortage after the baby-boomer generation started retiring this year but also by growing awareness of the need to secure qualified workers, especially women, over the long term amid the dwindling working population. Some electrical-appliance manufacturers have even introduced programs granting their employees leave to receive fertility treatment.

The government of Prime Minister Shinzo Abe, who took office last September, initially seemed less than enthusiastic about addressing the issue of a decline in the nation's birth rate. In January, Hakuo Yanagisawa, the minister of health, labor and welfare, drew an immediate barrage of public criticism, especially from women, for calling them "birth-giving machines". His gaffe contributed to a decline in public support for the Abe government.

In February, the Abe government established a special task force on the low-birth-rate issue. The task force, chaired by Chief Cabinet Secretary Yasuhisa Shiozaki, has set a goal of realizing a better "work-life balance" through such new measures as the promotion of telecommuting, in addition to such orthodox steps as improving child-daycare services and encouraging men to take paternity leave.

The Abe government's public-approval ratings began sliding shortly after its inauguration last September. Although the approval ratings started rebounding in April, they have nosedived recently, in an ominous sign for Abe and his ruling Liberal Democratic Party-led coalition ahead of a crucial election for the House of Councilors next month.

The latest survey by the Asahi Shimbun, for example, showed that only 30% approved while 49% disapproved - a record low and an all-time high, respectively. The sharp decline in approval ratings is primarily due to the public anger over problems relating to the Social Insurance Agency's record-keeping blunders on pension-premium payments and also to public distrust in politics after a scandal involving agriculture minister Toshikatsu Matsuoka and his subsequent suicide.

The Social Insurance Agency, which still has some 50 million unidentified payment records, is under the jurisdiction of Yanagisawa's Ministry of Health, Labor and Welfare.

Hisane Masaki is a Tokyo-based journalist, commentator and scholar on international politics and economy.