Japan is widely known to be suffering from an aging population and a very low birth rate, but based on a new study, another country is outranking it.
According to a report created by German analysts of Hamburg Institute of International Economics, in partnership with BDO, their country is facing a potential labor crisis now that its birth rate has surpassed not only the neighboring European nations but also the rest of the world, including Japan.
While Japan posts 8.4 newborns for 1,000 of its people, Germany, on the other hand, has a slightly lower rate at 8.2. Other European countries that made it to the list are Italy and Portugal, which came in third and second, respectively. The UK, which has already expressed worry over its shrinking birth rate, is currently at almost 13.
Countries in Africa such as Niger have some of the highest birth rates in the world.
A low birth rate, at first glance, may sound attractive since it means inhabitants get to have a bigger share in the resources, but the long-term effects may be disastrous.
As pointed out by BDO, the lower birth rate in Germany means a higher wage cost because the labor market is going to shrink. They expect that 15 years from now, if the rate of birth remains the same or even dip lower, at least 61% of the labor force, those who are from 20 to 65 years old, will disappear. This may eventually slow down the progression of Germany's economy.
Right now, the analysts believe that a good way to boost the workforce is to allow more women to join it. They may also have to rely on immigration. However, this may be a potential problem since this has already been opposed by many of the country's residents and its politicians.