Guest editorial: Does Japan have some lessons for Vermont’s workforce?
The problems sound familiar. The labor pool is shrinking. The fertility rate is rock bottom. Immigration happens elsewhere. Unemployment is at a half-century low. Companies can’t find enough workers to staff their operations. The cost of providing for the elderly is climbing because there are fewer workers.
Typically that would be a place to avoid if avoiding stagnation were the objective.
But, although these are the circumstances in play, the expected downside has been avoided, which is starting to get attention around the world.
The place is Japan, which is in the second longest economic expansion it’s had since World War II. It’s like Vermont, only worse. Its population is one of the world’s oldest. It has a population of 126 million but is expected to drop below 100 million people by 2053. Its birth rate is far below the replacement rate and in the last five years its working-age population has dropped by 4.7 million.
But the stunning part about Japan is that the number of working people has increased by 4.4 million. The percentage increase of the population in the workforce has soared. The economy is booming.
The country took a long look at the labor pools it was ignoring, which were the elderly, women and immigrants. They made changes to attract workers who had retired, or workers — primarily women — who had never been encouraged to work. They raised the retirement age to qualify for their version of Social Security. Today, the average Japanese worker stays in the workforce until their late 60s or early 70s.
In stark contrast, 85 percent of Americans eligible for Social Security sign on at the age 62.
In Japan the challenge is particularly acute in rural areas. The young, like those in Vermont, head for the city, which leaves behind a disproportionate number of elderly people. The businesses gradually leave, seeing little to no growth and dim economic prospects.
What they’ve done is to launch programs that would bring retirees back into the workforce. Instead of the regular eight-hour shifts, they offer more shifts, but with fewer hours. The workers didn’t make as much as they used to but they didn’t need as much; the extra money allowed them a better lifestyle, but the hours were short enough not to infringe on their desire for free time.
The companies figured out that women would be more inclined to fill the empty positions if the work schedule were timed so that they could pick up their children from day care. It was also important for the factories to put in place shorter work weeks. The result has been the ability of these companies to hire the necessary people. The participation rate of women aged 55 to 65 has increased from 54 percent to 63 percent. The companies get the work done and the women are working as little as 10 hours a week. Companies were offering work shifts of six hours instead of the regular eight. It made a difference; workers responded and the economy began to strengthen.
Japan, in stark contrast to what we see before us with the Trump administration, almost doubled its foreign-born workforce. That has helped to reduce the inflationary pressure on wages.
No one argues that Japan can hold off the economic challenges that come about with a plummeting population level. But faced with the crisis that was attest to its economy a decades ago, it responded by being creative, figuring out how to tailor the needs of the workforce to the need of the nation’s employees.
Vermont has a similar demographic and a similar challenge. But what have we done to make it easier or more desirable for our retired to reenter the workforce? Are our retired offered a way back in that meets their needs? Do we have companies or programs that specifically advertise for workers age 60 and over? Do we have companies willing to offer six-hour work days for mothers?
This may or may not change things for the businesses looking employees in Vermont, and following Japan isn’t a long-term cure for a declining population. But it’s much easier to do better with what you have than depending on campaigns to lure people here from other places.
If Vermont follows the national norm, and if the median age at which a person retires is 62, and if the average life span reaches into the 80s, then don’t we have an untapped and pretty talented workforce that is lying fallow?
Let’s unleash a little of our creativity at home with those we already know.
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