Adapted by:
Rubén Andrés
WriterWriter at Xataka. I've been working remotely for more than a decade and I'm a strong advocate of technology as a way to improve our lives. Full-time addict of black, sugar-free coffee.
Alba Mora
WriterAn established tech journalist, I entered the world of consumer tech by chance in 2018. In my writing and translating career, I've also covered a diverse range of topics, including entertainment, travel, science, and the economy.
Japan’s demographic crisis is prompting authorities and companies to adjust their regulations. The goal is to maintain a balance between a rapidly aging labor force and a significant shortage of young workers.
One measure many companies are implementing is extending the mandatory retirement age. This change allows senior employees to continue working past the age of 70 if they choose to do so.
5.4 million senior employees. According to Nikkei Asia, Japanese companies employ more than 5.4 million individuals who are 70 or above. A Japan Business Federation report indicates that the employment rate among individuals over 65 in Japan is 25.2%. This rate is significantly higher than that of the U.S. (18.6%), the United Kingdom (10.9%), and France (3.9%).
According to the report, 99.9% of Japanese companies have implemented measures to ensure the employment of their workers beyond the age of 65. In 2023, Japan implemented a reform that raised the retirement age from 60 to 65. Moreover, 29.7% of these companies have further extended their policies to guarantee employment up to the age of 70 and beyond.
70 is the new 60. A 2023 survey conducted by Japan’s Ministry of Labor revealed that 80% of workers at retirement age wished to continue working beyond the legal retirement age. Among these, 70% preferred to remain in their current jobs.
In part, this desire to work past the age of 70 can be attributed to Japan’s high life expectancy rates. According to Japan’s Ministry of Health, Labor and Welfare, life expectancy in Japan is 87.14 years for women and 81.09 years for men. As a result, many Japanese employees reach retirement age in good health. This allows them to extend their working lives by adjusting their working hours to accommodate their physical capabilities.
“People in their 60s are young. In this era of labor shortages, managers need to find ‘valuable old men,’” Atsushi Morishita, the 78-year-old founder of kitchen equipment provider Tenpos Holdings, told Nikkei Asia.
Pensions. One factor driving seniors in Japan to postpone their retirement age is the country’s pension scheme. With an aging population, the balance of the pension budget is becoming strained. There are more people receiving pensions than there are younger individuals contributing to the system.
Retirees can receive a maximum of $5,800 per year from the National Pension System. This amount is supplemented by allocations from private pension funds that workers and companies may or may not have paid into over the years. According to BNN Bloomberg, this results in an average monthly public pension of around $272, which isn’t enough for many to live on.
Companies catering to the elderly. According to Nikkei Asia, employees over the age of 65 make up about 15% of the corporate workforce in Japan. These employees typically work less demanding day shifts.
“Rather than fit people into a system, it’s essential to manage work hours in a way that suits our diverse talent,” Gashouen chairman Kazushige Mori pointed out. Gashouen operates care centers for the elderly. 15% of its workforce is comprised of individuals over 70.
Employees who work 20 hours or more are classified as contract employees, which entitles them to a higher hourly wage than part-time workers. Kimino Osada, president of building maintenance company Seisei Server, added, “Compared with young people, who have a high turnover rate, seniors who work for us for longer are the mainstay of our company.”
Image | Joshua Hicks