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Japan: Calling businesses to use employers up to 70 years old to adapt to the ageing population

On February 4, 2020, The Cabinet of Japan has recently agreed with the policy draft which calls the businesses to allow workers to work until 70 years old. From the costly lessons of choosing a nursing home - the most expensive form - to adapt to population ageing, the country is now trying to "redo" the work by focus on community-based methods. Facing severe labor shortages and the rising of social security costs, Japan is making greater efforts to take advantage of its ageing human resources.

Although not mandatory, these policies call for companies to choose one of five options, including (1) increasing the retirement age for workers; (2) removing retirement age regulations;(3) allow workers to continue working after retirement age; (4) contracting some jobs to people who reach the retirement age but want to continue working; or (5) arranging older labor to work on some humanitarian projects that these businesses are implementing.

The Japanese government is expected to submit the plan to the National Assembly with the expectation that the policies will take effect from April 2016. In the future, the government may require businesses to allow workers to work until age 70. However, being able to make good use of the older human resources requires a lot of effort from both the government, businesses, and communities to improve the working environment in accordance with the ageing process.

Japan has the highest percentage of older people in the world. Statistics from the Japan Ministry of Internal Affairs and Communications (MIC) show that by the end of 2018, the number of people aged 65 and over in this country was 35.88 million, accounting for 28.4% of the population. number. Japan's National Institute for Population and Social Security estimates that the number of people 65 and older will account for 30% of the population by 2025 and 35.3% of the population by 2040.

According to the Japan Times, these laws are one of Japan's efforts to deal with a serious shortage of labor, besides creating conditions for foreign workers to come to Japan. Forecasts show that Japan faces the risk of 6.44 million labor shortages by 2030. According to the census results published by the Ministry of Interior of Japan on July 10, 2019, the country has 8.62 million workers aged 65 and older, accounting for 13% of the total 66.64 million workers aged 15.