Commentary / Japan

Can we achieve an 'age-free' society?

by Yoko Ishikura

Age and aging are the big issues facing Japan. This is one of the fastest aging countries in the world, with 35.6 million people 65 or older in 2018, accounting for 28.1 percent of the population. It is estimated that 32.8 percent of the population will be 65 or older by 2035 — a figure that will rise to 38.6 percent by 2065. Although the rapid aging of the population has been anticipated for more than a decade now, it is in the last few years that awareness of the reality has hit home and not a day passes without news on this topic.

Recent issues concerning age and aging include 1) a heated debate and concern over the report on public pension system by a panel of the Financial Services Agency; 2) recommendations for the elderly to voluntarily give up their driver’s licenses; 3) a proposal to hire able-bodied elderly people to serve as assistants to professional care staff; and 4) a government request for companies to continue employing workers beyond the age of 65. While not directly related to aging per se, recent moves by companies to abolish the seniority wage system are among the efforts to depart from an age-driven system to one based on merit.

One of the most sensational news items was the FSA report that in addition to a pension, ¥20 million in assets will be required to cover the living expenses of a fully retired couple who live to the age of 95. The report was about the status of the public pension system in light of people’s increasing life expectancies and intended to alert people to take active steps for post-retirement financial planning.

Finance Minister Taro Aso declined to accept the report because the ¥20 million figure caused so much concern. But no matter how the amount was estimated, it is clear that pension benefits alone will not cover the expenses of retirees, who are living longer than previous generations. One in four Japanese who are 60 today can expect to reach the age of 95. The big debate indicates people’s concern for retirement financing.

Another age-related topic is traffic accidents involving elderly drivers. The nation has witnessed a series of accidents caused by elderly people driving the wrong way on expressways or plowing into children on sidewalks. The causes of such accidents include mistaking the accelerator for the brakes. In response, the government is considering a new limited driver’s license for people 75 or older that would restrict them to only driving cars equipped with safety features such as automatic brakes and in limited areas, as well as tightening requirements mandating that they take cognitive tests when they renew their license.

The Health, Labor and Welfare Ministry has unveiled a plan to incentivize the hiring by local governments of elderly people to serve as assistants to professional care staff. This move attempts to kill two birds with one stone: encouraging the elderly to continue to work and earn money, and helping to mitigate the growing shortage of caregivers.

Meanwhile, a variety of robots and other devices using the latest technology to keep elderly people company are becoming available. This addresses the need for the elderly to stay connected and not lose the opportunity to talk with others every day. It is widely known that those who lack social contact tend to suffer health issues — and may not be found for several days after they die. Having robots to monitor the movement of the elderly also helps alleviate the problems of wandering and solitary deaths.

The government is also beginning to encourage employers to retain workers until the age of 70. This is partially an attempt to prod people to start receiving pension benefits later in life to improve the sustainability of the pension system as the population ages.

As the graying population is increasingly discussed, the age range of 70 to 75 appears to now be perceived as a threshold distinguishing the “elderly,” and the nomination and approval of company executives often includes such a restriction. According to research in Japan, the age of 75 marks the beginning of a sharp decline in physical and mental capabilities.

Recently I came across a question and comments raised by a shareholder at a company’s annual shareholders meeting. He wanted to find out why people in their late 70s were being nominated to serve as non-executive directors because he was concerned about their age. He cited the brake-accelerator problem as one of the main causes of traffic accidents involving the elderly, and wondered whether similar confusion might happen in the company’s decision-making.

That was not the first time that the age of board members has been an issue at shareholder meetings. Some shareholders have expressed hope that younger people would be nominated rather than those in their 70s. The age of people in company management is becoming an issue not only for non-executive directors, but also for top management. Some companies set an age such as 70 as the upper limit for CEOs, although the average age of presidents is becoming higher. The average age of presidents in Japanese companies is currently 59.7, the highest since relevant records started being compiled.

Indeed, in Japan age has been and remains one of the most important factors in describing people. For example, it is customary to mention the age of people in media stories and several times I have had to argue with editors who wanted to mention my age when they published interviews with me.

Why is age such a dominant factor in Japan? Is this an appropriate approach when the life expectancy for both men and women has entered the 80s? I take issue with using age as a dominant criteria in judging people. There is a great deal of variability among people in the same age group. Some are very healthy, full of energy and have an innovative/creative spirit at the age of 80, while there are others who are fairly lackluster and inactive in their 60s.

The amount of money needed to live comfortably in retirement varies among people in the same age group. Whether people should continue to drive depends not only on their physical abilities but also on how indispensable cars are in their daily lives. In many rural communities it’s tough to get around without driving.

Some of those over the age of 75 or even in their 80s may be interested in learning new skills to supplement their extensive experiences, while others lack such curiosity and do not want to try anything new. Keeping all company employees on the payroll beyond 65 does not distinguish between these two distinctive groups. The re-skilling of elderly workers is necessary and makes business sense for the former group, while a similar effort for the latter group would be a waste of money.

Today’s society features not only a longer life expectancy but also much greater diversity among individuals. It is time we end the age-driven society and pay attention to the variety and differences among people in the same demographic. That way we will be able to realize an age-free society.

Yoko Ishikura is a professor emeritus of Hitotsubashi University and serves as an independent consultant in the area of global strategy, competitiveness and global talent. She is a member of the World Economic Forum’s Expert Network.

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