Three Future Scenarios: Which Will Young People and the Elderly Choose?

Three Future Scenarios: Which Will Young People and the Elderly Choose?


Three futures. Which will young people and the elderly choose?

In April, 2014, consumption tax grew from 5% to 8%. It is certain to grow to 10% in the future.

Then why is it necessary to raise the consumption tax in Japan? That is because the money that the government gives to the elderly, “social security expenses”, is insufficient. It is primarily used for things like pensions, health care, and nursing care.

* Trends in social security benefit costs and social insurance premiums.

出典:財務省 日本の財政関係資料

Furthermore, the elderly population is going to continue to rise, as well as life expectancy.

* Trends in the average life expectancy and future estimates.

* Trends in the ageing population and future estimates.

出典:内閣府 将来推計人口でみる50年後の日本

However, because this is for the sake of prioritizing the elderly who need pensions and caregiving, if you were simply told “social security expenses are insufficient”, then, for argument’s sake, if it were for the sake of prioritizing young people, then you could also take it to mean “the target amount for today’s social security expenses is too high.”

In other words, whether or not taxes rise, including consumption tax, is influenced by whether or not we are prioritizing the elderly or young people. So, let’s put this in order. Japan should pick between one of the following three future scenarios below:

1. Young people should work hard so the elderly can live long lives.
2. Young people should disregard the elderly so they can enjoy their own lives.
3. Or, both the elderly and young people should show restraint for each other.

To begin, let’s have a look at the first scenario.

1. Young people should work hard so the elderly can live long lives.

youth work for senior

Simply put, this means raising the quantity and quality of the manual labor force and contributing to the social security expenses. However, this will mean that it does not matter whether or not young people enjoy or dislike manual labor- they will have to work.

Specific improvement measures:
– Increasing the amount of people who can work.
→ Make a society where it is easy to have children, give women opportunities to work, take in foreign immigrants.

– Make it so people who want to work can work.
→ Increase business profits and hire new employees.

– Make working easy for people who do not want to work.
– NEET support, suicide prevention.
– Increase the salaries of people with low wages and increase consumption.
→ Facilitate occupation changes from companies that are not increasing profits to ones that are, and control the proportion of for-profit and non-profit organizations.

– Further increase the wages of people with high incomes and increase consumption.
→ Invest in companies with rising profits.

– Make it so occupational categories that were unable to work up until now are able to work again.
→ Relaxation of regulations on medical care and caregiving.

– Become able to demonstrate high results with regards to wages and working hours.
→ Make job training, studying abroad and programming required in education.

* The amount of people who can work is decreasing every year.

出典:厚生労働省 労働力人口の推移

Also, along with it being good to allocate money towards social welfare spending, I think the plan might also include regulating government money.

– Increase annual revenues that can be increased, decrease annual expenditures that can be decreased.
→ Have a fixed number of Diet members and government workers and make salary cuts.

Next let’s look at the the second option.

2. Young people should disregard the elderly so they can enjoy their own lives.

freedom for youth

To put it simply, this means lowering the target cost of social welfare spending (the longevity of the elderly) and letting young people do what they would like regardless of whether they have a high or low income. Those who would want to work could, and those who would not want to work would not have to. However, because of that, there would be a high probability that the average life expectancy would shrink.

Specific improvement measures:
– The government would decrease the amount of medical expenses it is responsible for. It would place a greater burden on the elderly.
– Decrease entitlements. Make the period for receiving entitlements shorter.
– Decrease living expenses after retirement.
– Decrease estimates for future average life expectancy. Decrease life expectancy goals.

* There is a deficit in the living expenses for the elderly.

出典:家計調査年報(家計収支編)平成25年(2013年)家計の概況

If young people become more able to do what they want, then they will not have the responsibility of making a lot of money, and they will have minimal incomes.

The results of that, for example, are:
– Increase in NEET. → If they can live on a minimum amount of income without working, they have no problems.
– Increase in non-regular employees, non-profitable activities and start-up businesses. → There is no need to have a high income.
– Concern over people committing suicide disappears. → Even if the number of blue-collar workers in society decreases, it will not be a problem.

* Trends in the number of NEET

出典:「ニート」数推移をグラフ化してみる(2014年)

Lastly, let’s have a look at the option of putting off longevity and doing what one wants for the sake of both the elderly and young people.

3. Both the elderly and young people show restraint for each other.

Simply put, this means that young people more or less make money from good jobs even if they do not want to, life expectancy goes even further down than now, and the elderly live brazen, short lives.

Also, by increasing the retirement and pension ages, and this goes for both young people and elderly alike, the ages of blue-collar workers and the elderly can change.

* Trends in the retirement age in businesses

出典:厚生労働省 雇用管理調査

Conclusions

Which age group currently has a high percentage of people voting? I think we know even without me stating it, but it’s the elderly.

* Percentage of people voting in their 60’s: 74%

出典:衆議院議員総選挙年代別投票率の推移

The elderly are choosing whether or not they will have a society that prioritizes them or young people. In contrast, because the voter turnout of young people is low, young people are entrusting the elderly with deciding their future.

Whether or not this is a good or bad thing depends on an individual’s system of values.

It might be good for young people who place importance on the elderly to work a lot. Conversely, it might be good for elderly who care about young people to vote for politicians who prioritize young people.

If young people believe that the elderly will only choose policies that benefit themselves, then it might be good for young people to report in as well. In contrast, if they believe that the elderly are wiser than them and therefore leaving it up to them will not cause problems, then they don’t have to vote.

If you take on a more shrewd viewpoint on this, you see that those who are doing what they want without contributing to social security expenses are unknowingly making the lives of the elderly difficult, and conversely, the elderly who are being pampered by social security expenses are unknowingly making the lives of young people difficult.

If there are elderly dying alone, then there are children falling into poverty as well.

* A 65+ year-old living alone passed away in their own home in Tokyo, ward 23.

出典:内閣府 高齢者の生活環境

* A lot of people are committing suicide every year.

出典:自殺白書 年齢階級別自殺者数の推移

* 1 in 6 children are poor.

出典:厚生労働省 平成25年 国民生活基礎調査の概況

※補足:若者と高齢者に関する資料

*Supplement: Below is data related to young people and the elderly/the above mentioned contents.

Support for the elderly:

How many elderly people should live to what age? (Assumption that longevity = happiness)
To what age can they work? (Can they support themselves?)
How much can they live on per month after retirement?
How much are social security expenses (income) for that purpose?
Specific improvement measures.

Support for blue-collar workers and the government:

How many blue-collar workers are there currently?
How much of the burden do blue-collar workers currently have?
How much of a salary is needed so that even if taxes are collected from blue-collar workers they are able to have fulfilling lives?
How much will education expenses for the next generation of blue-collar workers be, even at a minimum?
In order to fund this, how much of their profits should corporations need to pay?
How much should company employees work in order to pay for it?
NEET, low-wage workers (non-regulars and NPO), and lost labor (suicides).
Specific improvement measures.