Wednesday, November 09, 2011

Demography Exaggerated

Imagine a train wreck in slow motion. Really slow motion, stretched out over half of a century. That is the best way to describe the plight of the Rust Belt. City-regions deny the inevitable. Steel will come back, some day. Blame NAFTA. Bust the unions. Scapegoats and silver bullets abound. People develop, not places:

Unlike an earthquake, a demographic disaster does not strike without warning. Japan’s population of 127m is predicted to fall to 90m by 2050. As recently as 1990, working-age Japanese outnumbered children and the elderly by seven to three. By 2050 the ratio will be one to one. As Japan grows old and feeble, where will its companies find dynamic, energetic workers?

For a company president pondering this question over a laboriously prepared breakfast of steamed rice, broiled salmon, miso soup and artistically presented pickles, the answer is literally staring him in the face. Half the talent in Japan is female. Outside the kitchen, those talents are woefully underemployed, as Sylvia Ann Hewlett and Laura Sherbin of the Centre for Work-Life Policy, an American think-tank, show in a new study called “Off-Ramps and On-Ramps: Japan”.

The usual answer to the shrinking city or country brain drain is to seek more immigration and/or encourage more births. Meanwhile, structural unemployment is increasing and the people who do have jobs are becoming more efficient. Add to that robotics and other forms of automation. There's a dramatic policy disconnect.

As Hewlett and Sherbin suggest, we would do well to better develop the talent already in place. Yes, graduates leave and the result is brain drain. As "Hollowing Out the Middle" reminds us, what about the townies left behind?

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