Anxious individuals, Government at a standstill

Transcription

1 Anxious individuals, Government at a standstill - How to Live a Proactive Life in an Uncharted Era - May 2017 Vice-Minister and Young-Generation Project

2 Global Megatrends and Scope of Current Debate Changes that should be identified as a basis for debate on the future of nations International politics Rise of emerging countries Nationalism in major countries Geopolitical changes in the Asia Pacific region Collapse of nations and refugees Economy Prolonged low growth rates Slowdown of growth in emerging countries Monopoly of information by global companies Concerns over sustainability (food, energy etc.) Races, cultures and religions Rise of fundamentalism Conflict between conservative and liberal values Technology Fourth Industrial Revolution, singularity Progress in biotechnology Monopoly over new cutting edge technologies Growing importance of cybersecurity Society Change in and diversification of individual values A low birthrate and change in demographics Widening and perpetuation of inequality Information society 2

3 Liquid Society "Returning to authority" or "Ordered freedom Organization centered Individual centered Media Religions Gov. Companies Ethnic groups Free but unpredictable and insecure Governed by authoritative organizations Society is stable Restrictive but secure Resolved by Governments Passive individuals Urbanization Globalization Capitalism Technology (AI, Robotics) Growing weight of risk taking by individuals Societal Change is inevitable Not restrictive but unpredictable Responsibility for individuals Bilateral flow of information To allow individuals to have bold choices under the orderly freedom. Return to authority governance? (fundamentalism, nationalism and protectionism) We may be arriving at the turning point. 3

4 Image of the Typical Life Path People born in the 1950s to 1980s (including estimates) Completed A family centered life Get married, give birth and remain in wedlock 81 people 58 people 100 year life Living on pensions and retirement allowances? Typical Life Path Typical Life Path Not Typical Life Path Completed A Job centered life Get a job as a regular employee and stay with the same company throughout one's working career 34 people 27 people Pensions and retirement allowances Childless 5 13 Divorced 7 10 Housewives Households with children Giving birth Mandatory retirement age Life time employment, Seniority Job switching Single 7 19 Married People recruited fresh from school Non regular employees 3 14 Jobless, etc Educated 100 Women 100 Men 4

5 Japan has the world s longest health expectancy. The period of healthy life in old age is getting longer and longer. Retirement age 65 yrs old Japan USA Ret yrs 9.9yrs HE 69.1 Healthy expectancy 74.9 yrs old Life expectancy 83.7 yrs old LE 79.3 ( 点 ) Changes in exercise capability of the elderly 70 to 74 year olds now have the same capabilities as 65 to 69 yearolds of Five years younger in capability UK Ret yrs HE 71.4 LE Aged 65 to 69 Aged 70 to 74 Ger Ret yrs HE 71.3 LE 81.0 Source: Prepared by the Ministry of Economy, Trade and Industry from OECD (2015), WHO (2016) and Ministry of Education, Culture, Sports, Science and Technology (2015) H

6 Many retired men spend most of the day watching TV. 100% Activities of working people (men) aged 40 to 44 during weekdays 100% Activities of non working people (men) aged 60 to 64 during weekdays その他 Others 90% 受診 療養 Visiting a doctor 90% 80% 交際 付き合い Socializing Volunteer activities and social participation ボランティア活動 社会参加活動 スポーツ Sports 80% Pastime, etc. 70% 趣味 娯楽 Pastime and leisure 70% 60% Work Learning, self improvement and 学習 啓発 訓練 ( 学業以外 ) training (excl. school learning) 休養 くつろぎ Rest and relaxation 60% Rest, etc. 50% 40% Sleep テレビ ラジオ 新聞 雑誌 TV, radio, newspapers and magazines 移動 Movement ( 通勤 通学を除く ) 50% (excl. commuting) 買い物 Shopping 育児 Child care 40% Sleep Watching TV, etc. 30% Commuting 介護 看護 Care for elderly people and patients 家事 Household chores 学業 School learning 30% 20% 仕事 Work 20% Shopping 10% 通勤 通学 Commuting 事 Eating 10% Household chores の回りの 事 Miscellaneous chores 0% 0:00 1:00 2:00 3:00 4:00 5:00 6:00 7:00 8:00 9:00 10:00 11:00 12:00 13:00 14:00 15:00 16:00 17:00 18:00 19:00 20:00 21:00 22:00 23:00 睡眠 Sleep 0% Source: Prepared by the Ministry of Economy, Trade and Industry from 2011 Survey on Time Use and Leisure Activity, Ministry of Internal Affairs and Communications 6

7 What gives people in retirement a sense of fulfillment in life? Elderly people who have a family or are working have a sense of fulfillment in life, but few elderly people who live alone or who are not working have that fulfillment. Feel completely fulfilled in life Feel no fulfillment in life Feel somewhat fulfilled in life Don t have much fulfillment in life Living 1 暮らし alone 8.7% 22.9% 35.6% 31.6% 4.6% 仕事はしていない Not working 18.5% 39.9% 36.2% 1.6% Three generation 3 世代世帯 households 12.7% 33.9% 51.6% Working for a company as a 会社の常勤 顧問等 permanent employee, advisor, etc. 2.5% 8.8% 44.0% 44.7% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Source: Prepared by the Ministry of Economy, Trade and Industry from 2013 Survey on ElderlyPeople s Attitude towardlocal CommunityParticipation, Cabinet Office 7

8 Currently, the option to spend the final days of life in places other than hospitals is mostly unavailable. People want to spend their final days at home. However, in reality, most people spend their final days in a hospital. Preferred place of death Others 13% Hospital 28% Home 59% 100% 80% 60% 40% 20% Change in where people spend their final days in Japan (From 1951 to 2013) Others Hospital Home 75.6% (Hospital) 12.9% (Home) 0% Year Sources: Prepared by the Ministry of Economy, Trade and Industry from Vital Statistics, Ministry of Health, Labour and Welfare and Survey on Elderly People s Attitude toward Health, Cabinet Office Source: Prepared by the Ministry of Economy, Trade and Industry from Initiatives by the Ministry of Health, Labour and Welfare concerning Terminal Care, Ministry of Health, Labour and Welfare 8

9 Around 20% of the national healthcare expenditures are for people 80 years or older, most of which is accounted for by hospitalization costs. Age group Per capita healthcare expenditure by age group (FY2013) (10,000 yen) In hospital patients + meals and life care Outpatients +prescriptions 23% of national healthcare expenditures (9.2 trillion yen) Ave. life expectancy (2013) Women: 86.6 yrs old Men: 80.2 yrs old Source: Prepared by the Ministry of Economy, Trade and Industry from Vital Statistics and Report on the Provision of Healthcare Benefits, Ministry of Health, Labour and Welfare, and OECD Health Data 2014, OECD Stat Extracts 9

10 (%) 100 Life course after graduating from senior high school by household annual income bracket (FY2005) The higher the parents annual income is, the higher the rate of children s university enrollment. Others Highest academic achievement Breakdown of employment status by highest academic degree (2013) Around half of people with a junior or senior high school diploma work as non regular employees Non regular employee rate Junior high school 62% 50 Vocational schools/ junior colleges Universities Senior high school Specialized training colleges/specialized courses 36% 43% Getting a job or more Household annual income (10,000 yen) Children from poor families cannot escape the cycle of poverty Technical colleges/ junior colleges Universities Graduate schools 12% 20% 40% Overall average: 36% (2012) Per capita annual education expenditure by household income bracket (2009; when the child is in ninth grade) Education expenditures increase in proportion (10,000 yen) to the annual household income (10,000 yen) 600 Average annual income by employment status (2014) The annual income of non regular employees is a third of the income of regular employees Regular employees Non regular 3 million 5 million 7 million 9 million (Yen) 0 employees Household annual income Total Men Women Source: Prepared by the Ministry of Economy, Trade and Industry from Employment Status Survey, Labor Force Survey and Statistical Survey on Private Sector Salaries, Ministry of Internal Affairs and Communications; Survey on Attitudes toward Life, Japan Institute of Life Insurance; and analysis by the Research Institute for Advancement of Living Standards and Boston Consulting Group 10

11 A harsh society for working generations Breakdown of government expenditure for individuals (2013) [% of GDP] 12 Japan s expenditures for working generations are low compared with those for the elderly even if the impact of the aging society in Japan is considered Exp. for the elderly (Pension and nursing care benefits) Healthcare Exp. for working generations (Family, housing, labor turnover and unemployment) (The elderly population rate) Japan 本 Germany ドイツ スウェーデン Sweden U.K. 英国 国 U.S. 25% 21% 20% 17% 14% Source: Prepared from Social Expenditure and Labor Force Statistics, OECD 11

12 As poverty of single mother families reflects societal stresses, it cannot be resolved through financial assistance alone. (fundamental solutions are also essential). There are few places where young people can make meaningful contributions to society. Japanese style employment system Regular employee =lifetime employment Regular employee =long working hours Long commuting time Regular employees =recruited fresh from school Alienation of people who cannot become regular employees Giving birth leaving the company Children also tend to become non regular employees. Wage inequality between regular and non regular employees Re employed women mainly working as non regular employees Vicious circle of poverty perpetuation Giving birth returning to work handling both childcare and work burdens Perception of child care as a responsibility for women Insufficient financial resources for investment in education. Poverty of single mother families Responsibility for child care assigned solely to parents Collapse of local communities Silver democracy (Democracy characterized by an excessive voting power of the elderly) Insufficient investment in children An insufficient amount of benefits provided to working generations Child care = family responsibility Children as a politically vulnerable group with no voting rights The elderly as a large voter base A social security system based on the perception of the elderly as vulnerable people An increase in singlemother families An increase in divorces 12

13 A huge gap exists between people s needs and current social system The elderly have concerns: (i) Elderly people who want to work after reaching the mandatory retirement age but who cannot find a job (ii) Elderly people who cannot spend the final days of their lives in places of their choice Generous pensions and healthcare benefits do not necessarily make the elderly happy. Additionally, single mothers have the following problems: (iii) Half of single mother families are living below the poverty line; (iv) Once workers become non regular employees, they can find it difficult to get out of poverty, with their children also trapped in poverty. The stresses to society are producing vulnerable people. The youth have concerns: (v) Although young people are strongly motivated to contribute to society, they cannot make meaningful contributions. 13

14 In the postwar period, Japan succeeded in establishing a reliable social security system and a fair economic growth at the same time. However, as the demographic changes, the system that was successful in the past is clearly not appropriate for the current situation of the country. Although the people s values are already changing, both vested interests involved in existing systems and fixed ideas based on such systems, are hampering reform. Because of the preconception that bold reform is impossible against the backdrop of a silver democracy, everyone may be missing or avoiding the fundamental problem. 14

15 How to change old values and entrenched systems which worked well in the past but which have now become obsolete Systems established in the postwar period Existing systems reinforce these fixed mind sets Changing values Mandatory retirement age system Life in retirement should be supported by the government. People should stop working and retire at a certain age. People should continue to participate in the economy as long as they remain healthy. Pension and nursing care systems Free compulsory education The elderly should be supported by working generations. Social security expenditure increases are considered inevitable by no reason. Child care is a parentʼs responsibility. Higher education only benefits individuals. Investment in children and education should be the top priority. Health insurance Everyone should receive the best medical care regardless of his or her wishes. Patients should receive all available therapies at hospitals. Whether or not lifesustaining treatment is applied should be left to the wishes of individuals. Public works Local allocation tax Solving societal problems is the governmentʼs responsibility. Rural areas should be supported by urban regions. Motivated and competent people should play a role in solving public problems. 15

16 Fundamental reform, based on new values, is needed Dramatic reorganization based on new values may soon be necessary, rather than incremental changes to individual systems. I. The society in which the elderly are regarded as vulnerable by age should change, to create a society in which everyone keeps contributing to society as long as they are healthy enough to work. II. Investment in children and education should be promoted as the top fiscal priority III. Responsibility for resolving societal challenges should not be entirely left to the public sector motivated and competent people should also play a role. Japan will create a bright future by restoring individuals sense of belonging to and connection with local communities and society. 16

17 A number of drastic proposals have already been proposed. Now is the time to determine and implement specific actions. Continue to participate in the economy as long as they remain healthy. Compulsory education for adults Mandatory retirement at age 40 Chien no Tamago (local communities as a whole raising children) Medical savings account NLI Research Institute Kashiwa City and the Univ. of Tokyo 2011 Singapore Investment in children and education as the top priority Education voucher system Children's insurance (additional social security payments to finance support for child raising families) Subcommittee on the Economic and Fiscal Vision after 2020 of the Liberal Democratic Party 2017 Scholarship for overseas study (Tobitate Japan) Ministry of Education, Culture, Sports, Science and Technology Compulsory preschool education Role of motivated and competent people in solving public problems Social impact bond Social Finance of the U.K. (NPO) 2007 (Japan Foundation in Japan) Regional currency (Innobucks) City of Manor and Stanford University 2009 Local management corporations Ministry of Economy, Trade and Industry Future Center FCAJ 2012 Living will A system under which voting power is awarded in proportion to the remaining life expectancy Basic income SDGs ESG investment New national wealth metrics Welfare indicators Enhancement of taxation on assets 17

18 The fact that the population of children is decreasing is the reason that investment in children and education must be increased. Previously, the common thinking was that working generations should support the elderly. Aged Aged people 2.1 people 1.2 people If we change our mindset and recognize that adults should support children, the support base for children will grow. Aged 0 19 Aged people 4.7 people 6.9 people 18

19 Japan is experiencing an advanced, aging society 20 years earlier than other Asian countries. Resolving problems for aging societies is a mission imposed on Japan and a worthwhile obstacle to overcome. If Japanese society makes bold decisions and changes itself, the actions will contribute greatly to Asia and the wider international community. (%) The elderly population rates in Asian countries Experiencing the aging of society 20 years earlier than other Asian countries Japan ROK China Thailand Source: World Population Prospects, the 2015 Revision, United Nations The elderly population rate refers to the proportion of the population of people aged 65 or older in the overall population. 19