The core of what I have repeatedly stated on this blog can be summarized in the following two points. While there are many other nuances, understanding these two is sufficient:
- The government can create as much money as it needs. Under the current system, this is manifested through the Bank of Japan’s purchase of government bonds. For the government, the outstanding balance of yen-denominated bonds is not “debt” in any practical sense. It is not even paper (banknotes) or metal (coins); it is purely a digital entry on a screen.
- Therefore, the critical metric is not the fiscal deficit or government debt (which is yen-denominated), but rather the current account deficit and net foreign debt, which primarily involve foreign currencies.
Based on these premises, it is a mistake to believe that the pension budget is in a state of “severe funding shortage.” If we take the stance of paying out pensions by tapping into the magnificent legacy left by the elderly—who supported the Japanese economy and built the world’s second-largest net foreign asset position—there is absolutely no need for pension “reforms” (cutbacks). However, when the discussion is left to the “experts”—the “tame” scholars (御用学者) of social security—it inevitably devolves into a mere exercise in balancing the books within the narrow silo of pension funds, leading to the conclusion that benefits must be cut and premiums raised. Consequently, despite running a massive current account surplus of 30 trillion yen, Japan continues to claim it “has no money.” They are looking at the wrong indicators.
As a result, the elderly live in constant anxiety about the future and have stopped spending. The working generation, also facing future uncertainty, is frantically saving through NISA and iDeCo. Under these conditions, private consumption cannot possibly grow. This is precisely why macroeconomic scholars and economists, rather than these narrow-minded “specialists,” should be discussing pension finances from a broader perspective. Yet, they too have joined the specialists in their book-balancing act. It is truly deplorable.
I have discussed this narrative in previous post, but today I want to approach it from a different angle. On July 1, 2025, the Persol Research Institute released a “Survey on Measures for Utilizing Employees in Their 60s.” As of this writing, it is publicly available. Among its findings, the most prominent result is that the sense of “redundancy” regarding employees in their 50s and 60s is conspicuously higher compared to other age groups.
How did it come to this? For those in their 50s and 60s, the “winners” have reached executive levels; those remaining are the ones who lost the promotion race. The survey asked about “challenges in utilizing regular employees” in their late 50s and early 60s. For both groups, the #1 answer was “declining individual motivation,” followed by #2, “low individual productivity.” Having been blocked from further promotion and seeing their wages drop due to “managerial age limits”—regardless of their actual performance or ability—they lose the will to work, and their productivity plummets. As someone in my late 50s myself, I find this deeply relatable and painful.
To some extent, this decline at the end of a corporate career is inevitable. However, is it right that so many people are forced to work into their early 60s without a shred of hope? While not true for everyone, many are working simply because they have no choice—their bodies are failing, but pensions don’t kick in until 65.
With the upper house election approaching, the issue of foreign labor has suddenly come into focus, but I personally believe the issue of the “elderly labor force” is just as severe (alongside the push for women’s labor participation). These people are being forced to work for low wages when they don’t want to, which in turn acts as a factor suppressing overall wage levels and inconveniencing other age groups. All the while, they are viewed as “unmotivated seniors overstaying their welcome.” This is a system where no one wins. The “pension sabotage” and the raising of the retirement age—all based on the illusion of a fiscal crisis—have resulted in nearly 30 years of declining real wages. The LDP and their “specialists” have created this miserable world.
What do corporations think? At first glance, it seems they are being forced to maintain redundant employment. However, there is another side: by having employees “retire” at 60, firms can re-hire the motivated and talented ones at low wages, while offering such dismal pay to others that they are effectively hounded into true retirement.
In a reality where the actual demand for labor over 60 is low, we should have kept the pension eligibility age at 60 and left the rest to the market. Then, companies would offer good terms to keep the employees they actually need, and others could retire gracefully. There would have been no “excess labor” of those over 60. Companies truly facing a labor shortage could simply offer high wages to entice seniors back to the workplace. Having experienced seniors rejoin the front lines as a genuine “asset” would have pleased both younger and mid-career staff. In that scenario, no one would have been made miserable. I repeat: the fact that this didn’t happen is entirely the fault of the LDP and the “experts.”
I have been unable to write frequently due to my primary job, but going forward, I intend to identify by name and critically challenge the “experts” who peddle these warped pension theories.
コメント