economy+population

The economy will not be able to get enough skilled work force for its manufacturing and services sectors. Labour would become costlier, increasing the cost of production. There will be more elders to tend, straining the medical and pension systems. The social sector expenditure by the Government will have to increase. By 2025, it is expected that there will be two dependents for every three workers. A drastic fall indeed from 1:12 in the year 1950. The dwindling work force would also result in lower purchasing power and reduced demand for goods and services. The domestic market will shrink, production will fall, as will the Government’s revenue, forcing it to manage higher medical and pension expenses with a lower income.

The demand for all the goods consumed by children will fall. Also, the demand for goods consumed by adults at the behest of children would also fall. Who will sell and buy all the chocolates, and confectioneries, schoolbooks and pen and pencils, toys, games? Where will the amusement parks and sports clubs look for their customers? Already there is talk that a number of schools have been closed for want of enough children. The whole situation would get into a vicious circle of low demand and lower supplies.

http://www.chillibreeze.com/articles/Japans-population.asp