Japan's Baby Boomers and the Year 2007 Problem Part 1.

(From Journal of Japanese Trade & Industry (JJTI))

Byline: Seike Atsushi

Japan's Baby Boomer Generation The term "dankai no sedai" (clumped generation) owes its origin to the title of the bestseller by the economist Sakaiya Taichi. It refers to Japan's baby boomers born during the years from 1947 through 1949, and sometimes includes those born in 1950. The large bulge in the population formation in Figure 1 represents this generation, and, as they get older, this bulge will move further up the pyramid. The baby boomer generation of Japan differs from that of many other countries such as the United States where it continued until the first half of the 1960s, in a point the period of increased birth is shorter - only the above-mentioned three or four years - making the bulge in the population pyramid more conspicuous. To be specific, around 2.7 million babies were born between 1947 and 1949 (another 2.3 million in 1950), 30-40% more than the years before and after this period. Japan's baby boomer generation has a very distinctive nature from a labor economics viewpoint. In short, they are the children of salaried worker's society. One might even say that they lived their lives in step with the progress of Japan's corporate society. In the late 1940s when the baby boomers were born, more than 60% of Japan's working population was self-employed (mainly home-based businesses), and less than 40% were employed in companies. However, this ratio changed markedly as the baby-boomer generation grew older, and by the late 1960s and early 1970s, when they had graduated from high school and university, the percentage of workers in the self-employed sector had fallen to less than 40% and employed workers made up more than 60% of the working population. We could say that Japan's baby boomers were born in an age of self-employment but found their jobs in the corporate society. Today, 85% of Japan's working population is made up of corporate employees, and more than 70% of the baby boomer generation fall into the employee category. This means that the labor economics problem presented by this generation is fundamentally one inherent to corporate employees, and for that reason, the solution would be found mostly through reform of corporate employment systems. The baby boomer generation are the children of corporate society, and their lives have been essentially prosperous. The period when they first entered the workforce, from 1962 (when those born in 1947 graduated from junior high school) to 1971 (when those born in 1949 graduated from university), represents the years of Japan's high economic growth. It was not at all unusual for the annual economic growth rate to exceed 10% in real terms, and the labor market was typified by hyper-employment and a shortage of workers. All things being equal, the large quantity of labor provided by the baby boomers might normally make finding employment difficult in terms of supply and demand in the labor market. Economic analyses show that in countries like the United States where the period of the baby boom was longer and the total number of the baby boomers was large, the baby boomer generation got the short end of the stick in terms of lifetime income, because a large supply of labor was available in the market when they found their employment. However, ...