The Abe administration has unveiled a package of “urgent” policy measures to realize what it calls “a society in which all citizens are dynamically engaged,” featuring a sharp increase in the capacity of nursing care facilities for the elderly and day care services for children. The measures are supposedly aimed at helping achieve Prime Minister Shinzo Abe’s “new three arrows” to boost Japan’s gross domestic product, raise the nation’s total fertility rate and prevent company employees from leaving jobs to care for their aging relatives. But the package fails to specify the fiscal resources to implement the proposed steps or address the severe problem of manpower shortage in the nursing care service sector — which raises the question of just how serious the administration is in pushing its new agenda.
Abe started mentioning “dynamic engagement of all citizens” as the new policy slogan of his administration — a term whose meaning left even some of his own Cabinet members and ruling coalition leaders puzzled — and installed his close aide as the new minister in charge when he reshuffled his Cabinet in October. It appeared to be part of the prime minister’s campaign to refocus public attention on the economy following the enactment of his government’s security legislation, which sharply dividing public opinion and temporarily pushed down his popular approval ratings.
The package unveiled last week, among other things, called for increasing the number of nursing care homes to accommodate 500,000 more elderly people by the early 2020s, making day care services available for 500,000 more children by the end of fiscal 2017 and raising the legal minimum wage by 3 percent each year so that it reaches ¥1,000 per hour by around 2020.
The increased capacity in nursing care facilities is reportedly meant to stop the growing ranks of company workers — roughly 100,000 each year — from having to quit their jobs to care for their relatives. The expansion of day care services for small children is aimed at supporting young couples in their efforts to raise a family so that the nation’s fertility rate — which was 1.42 in 2014, well below the replacement rate of 2.07 — will rebound to 1.8 by the mid-2020s. The hikes in the minimum hourly wages — at ¥798 on a national average this year — are billed as a step to boost consumer spending, which accounts for 60 percent of the nation’s GDP, and help achieve Abe’s stated goal of boosting the GDP from ¥490 trillion last year to ¥600 trillion by sometime around 2020.
Many of the proposed policy measures seem appropriate in the face of the nation’s demographic woes of the declining and aging population. Some of the steps should be steadily implemented as part of the efforts to ensure the sustainability of the nation over the long term. One problem with the package, however, is that it lacks a road map to achieve the goals, in particular the fiscal means to back them up, even though it’s billed as an a set of “urgent” measures. Unless it quickly fleshes out the package, the administration may not escape criticism that it is merely playing with catchy slogans to woo voters ahead of the Upper House election next summer.
The package was compiled after only three sessions of discussions among relevant Cabinet ministers and experts — an indication that much of its content is an assortment of proposals already prepared by the bureaucracy. The Health, Labor and Welfare Ministry is initially said to have proposed increasing the capacity of nursing care homes for the elderly and day care services for children each by 400,000, but the number was bumped up to 500,000 each at the last minute reportedly at the orders of Prime Minister Abe and his aides. It’s not clear, however, whether a solid plan is in place to achieve the increased figure.
One major problem with the nation’s nursing care services is the chronic shortage of manpower, which is expected to grow more serious as the aging of the population accelerates in the coming years. But the package does not spell out any measure to address this problem, such as improving the working condition of nursing care workers, whose average monthly pay is about ¥100,000 lower than an all-industry average.
At the current pace of increase, it’s estimated that the supply of nursing care workers will fall short of demand by 200,000 in 2020, and it’s feared the gap will widen to 380,000 in 2025 — when the last youngest members of the postwar baby boomer generation will have turned 75. Even today, some facilities that provide intensive care for the elderly are being forced to limit the number of senior citizens they can accommodate due to the high turnover of care workers and the difficulty in recruiting new ones. The situation could get even worse if more new facilities are opened without resolving the manpower woes.
Making day care services available for more children will support working mothers. But the shortage of such services is only one of a number of factors that keep the nation’s fertility rate low. They include the declining employment security of the younger generation since the 1990s, which tend to discourage people from marrying young and having children. As businesses have reduced regular full-time positions to cut back on manpower expenses, the number of people with low-paying irregular jobs such as part-timers have grown and now account for about 40 percent of the employed workforce. The administration’s package calls for promoting the transition of irregular workers to regular full-time jobs to help enable young people to marry and have children, but does not specify concrete steps to achieve that goal.
It would be a welcome development if Abe’s push for a “dynamic engagement of all citizens” signaled a change in the focus of his administration’s economic policies, which have so far tended to make the rich and the strong — such as big businesses and wealthy consumers benefiting from the yen’s fall against the dollar and the surge in share prices — grow even richer and stronger, with the hope that the benefits would eventually trickle down to the broader segment of the economy. But it’s hard to guess from the package alone how serious the administration is about its new agenda.
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