As the chaos linked to the coronavirus pandemic causes a spike in unemployment, the bleak economic prospects of Japanese working-age people are increasing concern that the nation's already low birth rate could slip further, deepening the country's aging crisis.

Japan, home to one of the world's longest-living populaces, is also the most aged society, with the highest percentage of elderly people anywhere in the world.

A group of elderly women sit on a bench for a chat in Mashiki, Kumamoto Prefecture, in April 2018. (Kyodo)

In 2019, people aged 65 or over made up a record 28.41 percent of the country's total population, according to government data released Aug. 5.

Combined with dwindling numbers of newborns, which dropped below 900,000 for the first time ever last year, the world's third-largest economy has a shrinking working population to draw on at a time when soaring social security spending to cover pensions and medical care for the elderly is weighing heavily on the budget.

"Japan lost the equivalent of the population of Tottori Prefecture" last year, said Masaji Matsuyama, a ruling Liberal Democratic Party member in the House of Councillors, in an interview in contextualizing the record 500,000-plus decline in the population of citizens in the 47-prefecture country in 2019.

It was the 11th straight year that the population of Japanese nationals declined.

The number of foreigners grew 199,516 to a record 2.87 million for the sixth straight year of growth. Only Shimane Prefecture did not see an increase in its population of foreign residents.

"Some private-sector surveys have predicted that the number of births might even dip below 700,000 next year due to the coronavirus' influence. This is an emergency," said Matsuyama, who served as minister in charge of countermeasures for the declining birth rate between 2017 and 2018.

The country's total fertility rate -- the average number of children born per woman during their reproductive years -- stood at 1.45 in 2015.

It was lower than 1.84 in the United States, 1.92 in France, 1.85 in Sweden, 1.80 in Britain, 1.50 in Germany, but higher than 1.35 in Italy, 1.24 in Singapore and South Korea, 1.20 in Hong Kong and 1.18 in Taiwan, according to the Cabinet Office. All figures were from 2015.

Japan began encouraging people in earnest to have more babies in the early 1990s following the so-called "1.57 shock" -- when the fertility rate dropped to 1.57 in 1989, sinking below 1.58 recorded in 1966, a so-called "hinoe-uma" (fire-horse) year.

In 1966, Japan saw a sudden drop in fertility rates due to a superstition that says girls born in a hinoe-uma year, which occurs once every 60 years, develop fiery tempers and might kill their future husbands.

Since the 1.57 shock, the Japanese government has adopted several measures to boost the birth rate, from building more nursery schools to facilitate mothers' workplace participation to providing more child benefits and reducing costs for prenatal checkups.

The measures, however, have failed to stem the decline. The country's fertility rate, which hit a high of 4.54 in 1947 in a postwar baby boom, plunged to a record-low 1.26 in 2005.

The rate recovered slightly to 1.45 in 2015, but has since trended back down to 1.36 in 2019, the fourth consecutive year of decline.

"The state must show the public now that it is serious about dealing with the problem," said Matsuyama, who is chairman of the LDP Policy Board in the upper house.

He said, "bold policies" are required to motivate young people to have and raise children.

One such step Matsuyama is calling for is providing a minimum 1 million yen ($9,400) lump-sum for every child born, which was among a set of proposals compiled in April by the policy board tasked with counteracting the falling birth rate.

Meanwhile, Makiko Nakamuro, a professor at Tokyo's Keio University, said the government must "reverse its way of thinking" and start to allocate more of the budget for children and education if it wants to stem the falling birth rate.

"Based on data provided by the Organization for Economic Cooperation and Development, the proportion of Japan's expenditure for public education to its gross domestic product is at the lowest level among advanced countries," Nakamuro said in a separate interview.

The expert on education economics said the country's budget has been "giving more, maybe excessive, considerations to elderly people rather than for children."

She is critical of a free preschool education and nursery program, both introduced on Oct. 1 last year.

The government should have "increased the number of nursery schools, as there are not enough nursery schools in Japan, before providing free services," Nakamuro said.

Around 20 years ago, nursery schools had "a welfare-like role" to play in helping low-income households earn a double income, according to Nakamuro.

"But now, many high-income households have two incomes," she said. Nursery school fees are decided based on the parents' incomes, and they become higher in proportion to the incomes.

"Making (attendance) free means giving bigger benefits to higher-earning brackets. Giving tax money to people in high-income brackets grossly deviates from the principles of social security."

The Cabinet approved policy guidelines in late May aimed at boosting the fertility rate to 1.8, calling for the provision of more public funds for fertility treatments as people are marrying later in life, resulting in a growing need for such, often expensive, treatments.

The guidelines also recommended increased allowances for child care leave to prod more fathers to take paternity leave, and more generous child benefits.

However, bureaucrats are skeptical about whether the state can secure financial resources to implement such measures since the coronavirus pandemic has dealt a severe blow to the state coffers.

"Financial resources are nowhere in sight," said one government official involved in efforts to turn the declining birth rate tide.

In April 2017, a government institute forecast Japan's population including foreign nationals, currently at 127 million, will fall below 100 million in 2053 and hit 88.08 million in 2065 when people aged 65 or over will account for 38.4 percent of residents.

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