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Economy

Japan crosses new aging milestone, with 20% now 70 or older

Abe signals shift in priorities to easing labor shortages

People stroll through Tokyo's Sugamo neighborhood, nicknamed the "Harajuku for grandmas" in reference to the trendy shopping district.

TOKYO -- As new estimates put the number of people in Japan age 70 or older at more than a fifth of the population for the first time, Prime Minister Shinzo Abe is signaling a renewed focus on contending with the economic impact of an aging labor force.

The 70-and-over segment of the population grew to an estimated 26.18 million, or 20.7%, the Ministry of Internal Affairs reported Sunday. That marks an increase of 1 million from last year, driven by baby boomers born from 1947 to 1949.

The number of people age 65 and older climbed to 35.57 million, reaching a record 28.1% of the population. They also make up 12.4% of the workforce, the biggest share ever.

Japan's demographic challenges pose an obstacle to the Abe government's effort to reignite economic growth, while straining social security programs. The new report adds urgency to this problem.

Policies for coping with Japan's demography seem poised to carry more weight in Abenomics after Thursday's leadership race in the ruling Liberal Democratic Party.

At a party leadership debate on Friday, Abe suggested winding down the unprecedented monetary easing that has prevailed for five years. Should he win Thursday's race as expected, Abe will likely step up efforts to expand employment opportunities for older people and foreigners.

Japanese companies are now required to let employees stay on until 65 if they so choose. The government will consider asking businesses to allow people to stay employed until 70.

Campaigning in the city of Tsu in central Japan on Sunday, Abe said he wants to let people keep working beyond 65.

Another proposal would push back the starting age for collecting pensions past 70 for those who choose to work longer, Abe said. People choosing to delay benefits would receive a larger payout.

Age 65 generally marks the start of retirement and public pension benefits in Japan.

Efforts to expand work opportunities for immigrants are also in motion. A new, more flexible work permit category is expected to be put into place next April, designed to bring more foreigners into understaffed sectors like construction, farming and nursing care.

Japanese corporate profits and employment have turned upward under Abenomics, but labor shortages have emerged as a bottleneck to the growth of the world's third-largest economy.

Companies, especially small and midsize businesses outside of major cities, face a worsening labor shortage that has increased the relative importance of older workers.

A record-high 8.07 million Japanese 65 or older held jobs in 2017. The portion of people of these ages who are employed grew for a sixth straight year, among both men and women.

Roughly three in four of these are nonregular workers, meaning they lack the job security of typical salaried staff. Asked why they chose part-time jobs, they most often cited the ability to work flexible hours, according to the Internal Affairs Ministry report.

Among the challenges older workers juggle is caring for loved ones. Nearly 2 million people age 65 or older had spouses or other family members that needed care last year. One-quarter of these people were employed.

Raising Japan's low birth rate presents a related challenge. Abe said he intends to move ahead with plans to provide free public education, using revenue generated by an October 2019 consumption tax increase that he says will happen as scheduled.

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