Japan’s Declining Population: An Opportunity to Improve the Quality of Labor

Japan’s Declining Population: An Opportunity to Improve the Quality of Labor

Japan’s population is shrinking and so is its workforce. But what if this crisis is also a chance? Japan’s population is shrinking fast. Just 680,000 births and 1.61 million deaths in 2024. By 2065, the working age population will drop to 45 million, almost half of what it was in 1995. Yet despite that, Japan added 340,000 workers in 2024, mostly women and the elderly. The potential is there, but the system isn’t keeping up. Real wages fell for the third straight year, even as big firms like Panasonic and Nissan cut jobs, and nearly 35% of new grads quit within 3 years. If Japan can’t grow through population, it must grow through productivity. That starts with better education, especially at the university level. More skills, less drift, less prestige, more preparation. A smaller population doesn’t mean decline. It means a chance to focus on quality over quantity and build smarter, stronger, and more resilient.

Japan’s population is shrinking, but improving education and labor quality, especially among youth, women, and the elderly, may unlock future economic strength.
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