First off let me say that the birth rate around the world is declining. Just take a look back on your grandparents? How many children did they have? My grand parents had 9 children, my parents had 3. I myself have 3 and that is because I have twins. Most of my friends only have and only want 1 child.

Now what is the reason for this worldwide decline in birth rates? It all boils down to money and the cost of raising children. Even though we are relatively richer than the last generations, our burdens and expenses are heavier.

Taking things back to Japan where I'm currently located and can see first hand what is going on, Japan is indeed a special case as the rate is decreasing drastically.

What is going on ? Why is the birth rate declining in Japan

Below is a diagram that summarizes the problems Japan is facing that many believe have lead to the low birth rate. I will go into more detail of these problems from my perspective and give some solutions I think can work.

Image by Culture life news

Low birthrate because of economic conditions

• salaries in Japan have been stagnant for years with only individuals in big companies getting a bonus to help them through the storm. Article about the the average salary of various occupations in Japan
• The taxes in Japan are plenty. General consumption tax, Resident tax, motor vehicle tax, land tax and the dreaded car fitness which is basically a huge tax racket.
• Japanese cultural beliefs. The norm is that you should have one job and stick with that employer for the rest of your life. Having a side job or business is basically frowned upon and most Japanese don't have the will to start something on the side as they are already overwhelmed with their day job.
• Most Japanese people do not believe in investing and their excess income ( if any) goes into the banking system where it loses value due to inflation making them poorer in the future. If you talk to the average Japanese about stocks they see it as gambling or a scam ( so imagine what many think of crypto currency). Most who engage in stocks and crypto keep it a secret.

What can be done

• Increase the salaries of these hard working people. More profit sharing.
• Cut out residence tax completely and increase general consumption tax. This way people can choose what they spend their money on. The resident tax has to be paid in whole or in part but most have no idea how the money is used. One thing is for sure is that it does discourage people in Japan, even depressing them.
• Encourage young Japanese to be more entrepreneurial. Teach them about stocks and investing, make it become a part of the culture. How can you have a first world economy where the masses believe the stock market is a scam but a majority of the men go to pachinko ( Japanese type casinos) regularly?

Less working to support the elderly

• While the birth rate is declining the rate of the aging population is increasing. Many families can't afford to send their elderly parents/grandparents to nursing homes and end up staying home with them and living on their pension. While some have no choice but to go to work and leave the elderly by themselves, sometimes in their own homes. Talking to a police friend, I asked him what is the most common thing for him to do in his daily work. His said, " one of the major things I do is process the scene of elderly people who have died for days without anyone realizing it, people in the neighborhood usually find out about the deaths after they start to smell the corpse rotting."

what can be done?

• Create more affordable nursing homes.

Increase taxes to support social security

• pension and health insurance are extremely expensive in Japan. Together they will add up to 20% of workers salary. But remember, there are other taxes to deal with on-top of that.

what can be done?

• In every country, health insurance should be free. The money paid for Pension could be used for government bonds so that when an individual comes of age to start collecting pension, inflation would not have gotten the best of it.

Decreased wealth pushes down consumer spending

• Because inflation has taken its toll on the yen, many young people can't see themselves getting married ( especially men) as they believe their income wont be able to sustain a family.
• Many young people would rather spend the little money they earn on themselves rather than on a family. ( Nice clothes and nights out over suffering with a family).
• The cost of infant products ( clothing, toys etc) are inflated because the marketers know they can take advantage of parents with newborns.

What can be done

• Again, encourage investing and a business mind set.
• More benefits for having children ( at the moment, each child under the age of 3 receives 15,000 yen a month, age 3 up to 18 receives 10,000 yen a month).
  Now isn't that interesting. As the child reaches 3 years old, the allowance is cut down to 10,000 yen, but in reality you are just getting back some of the taxes you already paid for. And as a child grows, the expenses increase. ( schooling is not cheap)
• If they really want people to consider having children again, all establishments that have the power to give some benefit to families should step up. Offer more discounts, less interests etc. Give families more benefits and less doubt.
• The government could offer subsidies for companies dealing in infant products. Also monitoring the sector to make sure that marketers are being fair.

Deflation

• While the expenses of companies are being cut in order to stay competitive, so are the jobs that use to employ young Japanese straight out of Junior high or high school. The jobs are no longer secure and many companies are outsourcing to foreign nationals who will work harder without complaining with little to no benefits. So the landscape has become more competitive with many seeing the need for a higher education in order to get and keep jobs. Who would want to start a family in an unstable situation.
• Even with a degree from a university, the chances of landing a well paying job are far less than they were a decade ago.

What can be done?

• Again and again it all boils down to culture. Teach the children how to be hustlers, business minded investors. If we take a look at Japan's neighbors, for example China, the business mind set is well ingrained in the youth with many starting small businesses in their teens.

One final factor contributing to the declining birth rate.

The narrative in the paradigm is that the birth rate is declining. Now I'm not helping much by writing this post but I think the narrative is in the news too often. It gives the population a sense of doubt towards the future and may even demotivate some form thinking about starting a family. What should be the narrative is the many things that the government and companies are doing to benefit families. Talk about the stores offering discounts on infant items, talk about the low interest loans for family homes. Talk about interesting opportunities on the internet to earn extra income. Give people ideas of hope.

What is naturally taking place in Japan due to the increased aging population and the decrease in the birth rates is that more foreign nationals are coming to Japan to work and make a life here because of the opportunities available. Some argue that in the future Japan will be a melting pot of cultures and many don't think its good for the country. Others see it as necessary. The way I see it, globalization must prevail but at the same time no matter how many foreign nationals end up living in Japan, the culture will remain strong and that is the most important thing.

Thanks for reading, please share your thought below.

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