Record 49% of Japanese companies allow seniors to work beyond 65

The Japanese Health, Labour and Welfare Ministry yesterday released a report which reveals that the proportion of companies where every employee can work until age 65 or beyond if they choose has risen to a record 48.8 percent this year. The figure is up 0.9 percentage point from 2011, according to the government report.

Nearly 6 million Japanese people older than 65 are still in the workforce for money, health or to seek friends – the highest proportion of employed seniors in the developed world. One senior employee, 69-year-old Mishima, said, “Keeping a regular job is the most stimulating thing for me…if I was at home all day, I’d get out of shape and my wife would fret about all the extra chores she’d have to do.”

At the moment, the Ministry requires businesses to introduce at least one measure to secure employment for anyone up to age 65. Such measures include raising or abolishing the retirement age, and reemploying people past the retirement age. The report, based on data from 140,000 companies in Japan also found that 73.6 percent of 430,036 workers who reached retirement age in the past year were rehired. On average, Japanese men exit the labour market aged 70 and women at 67.

It is thought that this high level of companies with employees allowed to work beyond 65 is due to small businesses suffering from a lack of staff. Companies with over 300 employees are in general less likely to ensure the possibility of continued employment for seniors.

Japan’s lower house passed legislation this month that would give private-sector employees the right to keep working for another five years, up to age 65. This revision of the law was prompted by imminent changes to the government’s public pension system. From next year, the state pension eligibility age will rise from 60 to 65. “The raising of the retirement age, it’s a good thing, and more importantly, we have no alternatives,” said Michael Hodin, a researcher at the Council on Foreign Relations in New York specializing in health policies and aging populations. Current concepts of retirement do not make sense in the context of 21st century demographics, and governments are looking to reframe the social contract, he said. The new retirement age for state pensions will come into effect in April.

Sources include: Yomiuri, Japan Times, Bloomberg

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