The government on Wednesday urged companies to extend employees’ retirement until the age of 70 as part of measures to address a severe labor shortage due to Japan’s rapidly graying population.
The government will urge companies to make efforts to secure employment for workers up to the age of 70 through a host of options such as continued employment after reaching retirement age, support in finding new jobs at other firms, financial assistance for freelance contracts and entrepreneurship support.
Many companies set a retirement age of 60, but employees can work until 65 if they desire and employers are legally obliged to continue hiring them.
“It is necessary to provide a variety of options to make use of the expertise of elderly workers,” Prime Minister Shinzo Abe said at a gathering to discuss future growth policies. “I want healthy, willing elderly people to use their experience and wisdom in society.”
The plans were presented at a meeting of the Council on Investment for the Future, headed by Abe. The government plans to submit a bill to the Diet next year to revise related laws for stable employment for elderly people, the prime minister said. The government will not make the string of measures mandatory under the revised law, but will consider making it so in the future, sources said.
Ensuring an adequate workforce is also important for securing funds to meet the rising social security costs of an aging society.
One in every three people in Japan is expected to be 65 or older in 2025, government data shows.
The government has already introduced a series of steps to make up for the labor shortfall, such as bringing in more foreign workers and promoting women’s participation in the labor market.
Still, Japan is expected to face a shortage of 6.44 million workers in 2030, according to an estimate by Chuo University and Persol Research and Consulting.
Among the 66.64 million workers aged 15 or older last year, 8.62 million, or 13 percent, were 65 or older, the government said.
While increasing employment opportunities for elderly people, the government is not considering raising the starting age for receiving pensions, the sources said.