The Post tells us that Japan faces "a demographic calamity driven by aging and low birth rates. U.N. forecasts say the country's population of 127 million could shrink by 25 million by 2050." Just imagine, its greenhouse gas emissions will be 20 percent lower than would otherwise be the case due to a declining population, the horror, the horror. An economist would tell the Post that a declining population will mean that it will be harder to find people for low paying and low productivity jobs. Japan will probably have a smaller share of its population cleaning other people's homes, working in restaurants, tending other people's yards and gardens, and driving taxis. This might be really bad news for the higher income people that typically employ such people, but it is very good news for the workers who would otherwise fill these jobs, but will instead have higher paying positions available. The article also warns that "for Japan to maintain its high standard of living and preserve its position as the world's second-largest economy, after the United States, analysts say it needs to invest heavily in reforms to increase economic productivity." Actually, Japan's productivity is already growing, not shrinking, so it should be able to maintain its high standard of living even without reforms, although measures that increase growth will further increase its standard of living. As far as its number two standing internationally, China's GDP is already close to twice Japan's so the country need not worry about being number two.
--Dean Baker
