August 24, 2015
If folks can take a break from worrying about how robots are going to take all the jobs, they may want to look at a NYT piece on Japan’s excess supply of housing. The basic story is that because of Japan’s declining population there are now hundreds of thousands of homes across the country that are sitting empty because no one wants them.
While this is an interesting and important story, the piece also includes the standard nonsense about the demographics of an aging population devastating Japan’s economy. It tells readers:
“The demographic pressure has weighed on the Japanese economy, as a smaller work force struggles to support a growing proportion of the old.”
Let’s see, if the smaller workforce is struggling to support a growing population of elderly they must be working weekends and overtime to make up for the shortage of workers. It seems the OECD hasn’t gotten word of these struggles. According to its data, the average work year has fallen from 2,121 hours in 1980 to 1,734 hours in 2013. If Japanese workers put in as many hours today as their counterparts did three decades ago, it would give them the equivalent of 22.3 percent more workers. It’s hard to see the evidence of the struggle in these numbers.
The piece also comments that Japan is:
“still building more than 800,000 new homes and condominiums a year, despite the glut of vacancies.”
Maybe if the country is having such a hard time meeting the needs of its retirees, it should spent fewer resources building homes that may not be needed.
Seriously, the effects of productivity growth swamp the demographic changes that the elites keep yapping about. If Japan could lift its rate of annual productivity growth by 0.5 percentage points over the next thirty years, it would swamp the impact of its aging population. If we believe anything remotely like the robot taking our jobs story, then aging is nothing to worry about. In fact, it is a good thing since it means there are fewer people for whom we have to find work.
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