Desperate measures to reverse Japan’s declining population

The outline of the “unprecedented” policies to reverse Japan’s declining birthdate were announced on March 31, but many are shaking or scratching their head. Some of the suggested measures are:

• Increase of lump-sum payment to offset the cost of childbirth not covered by public health insurance by approx. 800USD (from ¥420,000 to ¥500,000);
• Removal of income cap to allow universal childcare allowance at the level of approx. 100-150USD per month until the end of high school years;
• Subsidy of approx. 1,000USD for every newborn;
• Tuition reduction, exemption and scholarships for households with multiple children and for university students studying science, technology and agriculture;
• Subsidies to prevent income reduction for working parents with children up to age two; and
• Establishment of more daycare centers

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It is unclear if any of these measures will actually come through, as the government has not secured or planned for funding schemes for them. There is a talk of raising taxes to afford these interventions, which defeats the purpose, as young families are already struggling with wages that have remained flat and far below that of the Organisation for Economic Co-operation and Development (OECD) for three decades.

Unresolved high educational expenses

While the average wages have not risen, Japan continues to rely heavily on household incomes to raise school-age children. The Japanese government spends less on education than other advanced economies, and the rest falls on individual efforts. The statistics demonstrate the high ratio of private spending throughout primary to tertiary education, and this does not include tutoring sessions and cram schools (juku) that Japanese students have to endure until they enter universities. This weighs heavily on women, who on average, earn far less than men in Japan. My son is eight years old, and one of the common topics among moms around me is the cost of juku – that they will have to afford for the next 10 years.

Parents are in the long haul until their children come of age. The proposed expansion of daycare services, prevention of income loss for working parents with infants and discount for college tuitions (still one of the highest in the world) for qualifying families – albeit helpful – leave parents to fend for themselves between age two and 18.

Solutions in decent wages and welcoming environment

Is the difference of $800 at childbirth, or the one-time payment of $1,000 for an additional child, enough to entice families to take on the overall financial burdens that span over two decades? Meanwhile, some businesses have decided to offer a compensation of up to approx. $1,000 to the co-workers of employees who take maternity/paternity leave. Although this initiative has been heralded as progressive, I could not help wondering whether a maternity/paternity leave must be ‘tolerated’ with cash offers.

Is the payoff of $100 or $1,000 here and there really going to change people’s mind about having families, after decades of the declining birthrate? How about “unprecedented” measures to increase wages, ameliorate gender gaps and overhaul the educational system, so that larger families are embraced, instead of squeezed?