75-Year-Old Job Hunters Could Become New Normal in Aging Japan

(Bloomberg) -- At the age of 75, Mikiko Kuzuno found herself recently laid off and applying for a job at a factory near Tokyo. She insisted on making the application in person.

“I asked them to please take a look at me,” she said. “I wanted to show them how healthy I am. Some people are very frail.”

Kuzuno, 78, is now three years into work at the small plant in Warabi, where she helps launder and package steamed hand-towels given to customers at restaurants. It’s demanding work where she stands throughout her three-hour shift, but she doesn’t think of retiring -- partly for financial reasons, and partly because she hates hanging around at home.

This could be Japan’s new normal, with people working into their 70s and beyond, adding a new facet to its reputation as a nation of workaholics. Prime Minister Shinzo Abe is seeking to keep people like Kuzuno employed longer so they can pitch into the tax base and ease the burden on government spending, as the country copes with having the world’s fastest aging population.

Japan’s graying population has propelled a surge in social security spending, accounting for about one-third of government outlays in the fiscal year that ended in March, much of which was funded by debt. Thus, Abe is advancing legislation to encourage companies to abolish retirement ages and take other measures to keep people on on the job past age 70. A second bill would make such policies mandatory.

The government’s also mulling a new option of allowing workers to delay receiving their pension payouts to age 75.

Playing Croquet

A higher proportion of Japan’s population is aged 65 or older than in any country in the world, and its life expectancy at birth of 84 is tied with Switzerland for first place, according to World Bank data. With a declining birthrate, Japan’s population is set to slump by almost a third by 2060, by which time about 40% will be 65 or over, according to the National Institute of Population and Social Security Research.

“‘We need to change the structure of economic society to fit the model of a 100-year life,” Shinjiro Koizumi, 38, a lawmaker who heads a ruling Liberal Democratic Party panel on aging, told Bloomberg News. “That has to be our top priority, or we won’t be able to reform social security to give hope to the next generation.”

Convincing people to put in a few more years on the job may prove difficult. A poll published by the Cabinet Office in January showed about 38% of Japanese wanted to work beyond the age of 65, while more than 50% would prefer to leave the workforce before that age.

The jobs Japan needs filled the most in labor-intensive fields like construction, nursing care and delivery services, aren’t the jobs typically associated with older workers. Rural areas with the highest percentage of residents 65 and above also have few jobs suitable the graying workforce.

One person opening the door to older workers is Atsushi Morishita, 72, founder and president of Tempos Holdings, which runs a chain of 58 commercial kitchen equipment outlets. He was inspired to do so by his father, who worked on a farm into his 90s.

“In Tokyo, as soon as people turn 65 they are wasting their time playing croquet or something. So I thought I would provide a place for them to work,” Morishita said. About a quarter of his workforce is 60 or older.

Business owners must understand that older workers typically mean lower productivity, so wages and output levels need to be managed accordingly, he said.

“Somewhere like Toyota requires high productivity, so I don’t think they could do it,” he said. “But in a lax company like ours, it’s fine. We’re not making a loss.”

Pension Problems

One employee is Takayoshi Kimura, 73, who was hired when he was 58 and eventually became one of the top sales staff at a busy Tokyo store. He had closed his struggling business in a rural prefecture and came to the capital in search of a job, leaving his wife, an elderly-care worker, behind.

Kimura loves the excitement of meeting young entrepreneurs in his job, while his friends in rural Japan are lucky to be hired as security guards.

“There are no jobs at all in the countryside,” Kimura said. While his wife urges him to return, he wants to stay until he’s 75. Morishita told him he’ll be fine for another 20 years, he said.

It’s unclear whether enticing more retirement-age people to stay in the labor force will make a significant dent in Japan’s pension bills, given that many opt to receive pension payments while continuing to work.

While the government wants to let workers delay their pensions, only about 1% of the eligible population is even taking advantage of the existing option, under which they can delay up to age 70 in return for a more than 40% increase in payments.

Koizumi, the lawmaker, blamed it on poor public relations. “Private sector companies think hard about how to get their message across, but the national bureaucracy doesn’t do that,” he said.

Older employees say good health and enjoyable conditions help them put off retirement. Factory worker Kuzuno has another motivation -- she is single and determined not to become reliant on her two daughters.

While she’s been in work since she was a teenager, most of the jobs she had didn’t come with corporate pension benefits. She lives on a meager state pension, supplemented by her pay from the towel plant.

“I want to work as long as I can. My daughters have their own problems,” she said. “I can barely make ends meet, so I really need to do my best.”

To contact the reporters on this story: Isabel Reynolds in Tokyo at ireynolds1@bloomberg.net;Emi Nobuhiro in Tokyo at enobuhiro@bloomberg.net

To contact the editors responsible for this story: Brendan Scott at bscott66@bloomberg.net, Jon Herskovitz

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