Jurnal Transformasi Global Vol. 10 No.

3 [2023]
Universitas Brawijaya

Japan’s Aging Society: A Challenge to Japan’s Diversity &

Social Inclusion
Fransisca Fleicia Paschaline, Rama Ardhia Prastita, Ericka Mega
Universitas Gadjah Mada
ABSTRACT
Japan is a super-aged society. The combination of high life expectancy and low fertility rates
leads to a decreasing population. The situation is so chronic that at the extreme consequences,
Prime Minister Fumio Kishida warned Japan was "on the brink of not being able to function
as a society." Based on this issue, the article aims to discuss and examine how Japan's
demographic crisis affects diversity and social inclusion in economic, social, and political life
and what policies should be enforced to create a more diverse and inclusive society in Japan.
It is an important topic as no existing literature comprehensively examines how the aging
society directly impacts diversity and social inclusion. This paper uses the concept of
shrinkanomics, which describes the troublesome economic development in Japan due to its
shrinking population, and the theory of inclusive social development, which emphasizes that
sustainable development can only be achieved if all members of a society are included. This
paper argues that an aging society significantly impacts the political issue of strict immigrant
policies and Japan's identity, the economic gap between generations, and the social issue of
the healthcare system. To address these issues, the authors argue that there is a need for
sustainable policy by pursuing a proactive approach to immigration, enhancing public-private
partnerships to promote inclusive economic innovation, and strengthening the home and
community-based care system.
Keywords: Aging society; Diversity; Inclusivity; Japan; Shrinkanomics

INTRODUCTION
Japan is the fastest-aging country in the world. Labeled as a “super-aged society,”
Japan has an estimated 37.5 million people (or about 29.8% of its population) aged 65 and
over in 2021 (Lubman, 2023). While the world’s median age is only 30.2, Japan’s is 48.7. This
data indicates a graying society that does not come overnight. In 1950, Japan was
experiencing a postwar baby boom, thus shaping an expansive population pyramid.
However, the population pyramid of Japan changed significantly over the last seven decades.
In 2020, Japan turned into a constrictive pyramid, projected to be more severe in 2045. Going
from a baby boom to a demographic crisis, what drives Japan into this situation?
The combination of high life expectancy and low fertility rates leads to a dramatically
decreasing population. Japan’s life expectancy in 1950 was around 60 years, yet healthy habits
and advanced healthcare extend its average life span 12 years past the world’s age (Lubman,
2023). In 2019, Japan reached 84.4 years when the world average was only 72.8. This is good
news, but it means a higher proportion of elderly population. Moreover, Japan has not been
able to fulfill the level needed to sustain a country’s population of 2.1 children per woman
(Lubman, 2023). Developed countries face lower fertility rates, but the issue is acute in Japan.
As of 2020, Japan has a total fertility rate of 1.4, one of the lowest birth rates in the world.
The increasing age of marriage and the decreasing rate of marriage project a further
worsening of Japan’s future demographics (D’Ambrogio, 2020).

[corresponding author: fransiscafleicia@mail.ugm.ac.id]

Jurnal Transformasi Global [21]

This situation is heavily debated by both the public and government. Japan Prime
Minister Fumio Kishida has explicitly warned that Japan was “on the brink of not being able
to function as a society” (Wright, 2023). With fewer young people entering the workforce,
there may be a shortage of workers in specific industries, which could lead to a slowdown in
economic growth. The aftermath is risking diversity and social inclusion by limiting job
opportunities and career advancement for younger and more diverse workers. With an aging
population, there are fewer young people to support financially and physically the social
security system for an increasingly elderly population, especially in the healthcare system and
pension. The diversity and inclusion of the social security system have been at risk.
Furthermore, the shortage of workers has increased the demand for immigrant workers.
However, Japan has historically been a relatively closed society. Japan’s strict immigration
policies and language barriers have made it difficult for these workers to integrate into
Japanese society, leading to inclusion problems.
Based on the previous problems, this article examines Japan's aging society and its
consequences on diversity and social inclusion. It is an important topic as the existing
literature is very limited in examining how the aging society impacts diversity and social
inclusion. Thus it needs to be more present in research that directly assesses diversity and
social inclusion issues in a super-aging society. This article will discuss two main research
questions: (1) How does Japan's demographic crisis affect diversity and social inclusion in
economic, social, and political life? and (2) What policies should be enforced to create a
diverse and inclusive society in Japan? To those aims, this article will first discuss its analytical
framework. Then, the discussion section will be divided into three parts. First is an aging
society's economic, social, and political consequences. Second, the evaluation of current
policy in Japan. Third, policy recommendations that encounter economic, social, and political
challenges during the demographic crisis to achieve Japan's diverse and inclusive society. This
article will provide the conclusion and possible further research in the last section.

ANALYTICAL FRAMEWORK
Shrinkanomics: Analyzing the Societal Challenges of Demographic Trends in Japan
"Shrinkanomics" is a term coined by Gee Hee Hong and Todd Schneider to describe
the troublesome economic development in Japan over the last couple of decades due to its
shrinking population. Hong & Schneider (2020) argue that aging and shrinking population
affect economic and financial performance and shape the cities and public policy priorities.
Shrinkanomics can be used as an analytical framework to examine the implications of
demographic trends in Japan's economy, society, and politics.
Shrinkanomics viewed that the older and smaller population directly impacted the
labour force, market, and productivity, particularly in industries that rely on laborers, such as
healthcare and social service (Hong & Schneider, 2020). Besides the workforce, a shrinking
population also affects long-term economic growth and productivity (Hong & Schneider,
2020). As the younger population dwindles, there is a reduced demand for housing,
transportation, and other goods and services, a lowered tax and revenue, and a weakened
investment. It has ripple effects on related industries, including construction and
manufacturing, and leads to a decline in overall economic output. At the same time,
[22] Japan’s Aging Society: A Challenge to Japan’s
Diversity & Social Inclusion

shrinkanomics can also be utilized to examine the policy implications of Japan's demographic
crisis. Policymakers may be enlightened to encourage higher levels of immigration, improve
the quality of life, and invest in technologies and industries less reliant on human labour.
In a nutshell, Shrinkonomic as an analytical framework is useful for understanding
the economic, social, and political implications of the demographic crisis in Japan. Using this
framework, policymakers and researchers can develop more targeted and effective strategies
for addressing the challenges associated with population decline and aging society.

Inclusive Social Development Theory: A Perspective to Overcome Japan’s Aging

Society
Inclusive social development theory is a perspective that emphasizes the importance
of inclusive policies and programs for promoting social and economic development in a
society. Martha Nussbaum argues that sustainable development can only be achieved if all
members of a society are included in the process and benefit from its outcomes (Alexander,
2016). The theory suggests that social development should prioritize the needs of
marginalized and vulnerable populations, such as women, children, the elderly, people with
disabilities, and other marginalized groups. This involves taking into account their unique
needs and experiences in policy-making and program design.
The theory emphasizes the need for participatory approaches to development, which
involve engaging communities and stakeholders in decision-making processes. This can help
ensure that development programs are culturally appropriate, locally relevant, and responsive
to the needs of communities (Pais & Makavāṇā, 2018). Japan, like many other countries,
needs inclusive social development to address social, economic, and environmental
challenges and promote sustainable development. Specifically, there are several reasons why
inclusive social development is important for Japan. One of the serious challenges is the
aging population. Japan is known for having one of the highest proportions of older adults
in the world, with the population aged 65 years and older constituting more than 29.8% of
its total population (Lubman, 2023). This demographic shift creates new challenges for social
and economic policies, such as increased healthcare costs and declining workforce
participation. Therefore, ensuring inclusive social development for welders can encourage
the active contribution of this generation in society, the concept of active aging (Walker &
Aspalter, 2017).

RESULT AND DISCUSSION

Japan has been facing an aging population problem for several decades, and it is
considered a significant challenge for the country. There are a few reasons why this is the
case. First, Japan has one of the lowest birth rates in the world, which means that there are
fewer young people being born to replace the aging population (Jones, 2022). This has
resulted in a shrinking population and an increasing proportion of elderly people. Second,
Japan also has one of the highest life expectancies in the world, with people living well into
their 80s and 90s. While this is a positive development in many ways, it also means that the
elderly population is growing rapidly, which places a strain on social services and healthcare
systems. Third, an aging population can have a significant economic impact on a country. As
Jurnal Transformasi Global [23]

the elderly population grows, there are fewer working-age people to support them, which
can lead to a decrease in economic productivity and an increase in healthcare costs. In Japan,
this has resulted in a shrinking workforce and a labour shortage in some industries (Wada,
2015). An aging population can also have social impacts, such as increased isolation and
loneliness among the elderly (Walker & Aspalter, 2017). It can also put pressure on family
structures, as adult children may need to care for their aging parents, which can impact their
ability to work and support their own families.

Issues: Japan’s Aging Society Impact to the Political, Economic, and Social Diversity
and Inclusivity Issues

Political Issues: Strict Immigrant Policies and Japan’s Identity

Realizing the complexity of the aging population problem, this can potentially lead
to socio-political problems, one of them is immigration problem. Japan has historically been
a relatively homogenous society with strict immigration policies, which has made it difficult
for foreigners to live and work in the country (Chung, 2014). It is because of the country's
strict immigration policies that make it difficult for foreigners to obtain long-term residency
or citizenship. The process of obtaining a visa or work permit can be complicated and time-
consuming, and there are strict quotas on the number of foreign workers allowed to enter
the country. However, in response to the shrinking workforce, in recent years, the Japanese
government has been making efforts to attract more foreign workers in order to address
labour shortages and boost economic growth (Doerr, 2020).
Japan's aging population is placing a strain on the economy, which has led to
increased demand for foreign workers. Japan's aging population has resulted in a shrinking
workforce, which has led to a labour shortage in some industries. To address this, the
government has been increasing the number of foreign workers allowed to work in Japan.
However, there has been resistance from some Japanese citizens who are concerned about
the impact of immigration on Japanese culture and society. This has led to political tensions
and debates over immigration policy (Endoh, 2019).
In 2015, in the Sankei Shinbun newspaper, a conservative activist writer, Ayako Sono,
proposed racial segregation between immigrants and Japanese society. Sono emphasized that
her country needs to create a legal framework that strictly maintains the status of these
workers as immigrants, which does not allow naturalization (Moreshead , 2015). Her writing
has garnered critical responses from various groups, not only from Japanese society but also
from the international community. Many say that what Sono wants is a setback from the
global community. They stated that this was tantamount to reviving apartheid politics. Most
recently, the issue of immigrant welfare increased after the death of a young woman from Sri
Lanka in an immigration detention facility in 2021 (Yoshikawa, 2021). Protesters are calling
for amendments to Japan's Immigration Control and Refugee Recognition Act. Opponents
of the amendment argue that the Immigration Services Agency of Japan (ISA) reserves the
right to deport too many detainees too easily, including those in the process of seeking
asylum. The latest development on this issue is that the discussion was closed after the
amendment was rejected and the ISA promised to undertake organizational reforms to
[24] Japan’s Aging Society: A Challenge to Japan’s
Diversity & Social Inclusion

improve its medical response to detainees. However, that doesn't mean the agony over what
should and shouldn't be done about immigration in Japan continues.
In other sectors of immigrant problems, as the Japan elderly population grows, there
is a greater need for social welfare services such as healthcare and long-term care. However,
there are fewer working-age people to support these services, which can lead to an increased
burden on the government's finances (Wada, 2015). This can create political pressure to
restrict access to social services for non-Japanese citizens or to limit immigration altogether.
One of the other debates about immigration policy in Japan is the demographic changes. In
the long term, an influx of immigrants can change the demographics of a country, which can
create political tensions. In Japan, there is a strong sense of national identity and cultural
homogeneity, and some Japanese citizens may be resistant to demographic changes that
could threaten this identity. This can lead to political movements that are hostile to
immigration or that seek to maintain Japan's cultural and ethnic homogeneity (Takenoshita,
2016).

Economic Issues: Gap Between Generations

Ono (2021) argues that social inclusion is a challenge for diversity in Japan. Inclusion
in terms of gender, race, and lifestyle is a mainstream that is expected to be well protected in
terms of broader social norms. However, the problem of the aging population in Japan has
affected the Japanese economic system, which has impacted the socioeconomic
transformation in Japan. The "Gap between Generations'' in Japanese socioeconomic
transformation in Japan is generally increasing (Hoi, 2021). This problem generally affects
two main age groups: youth and the elderly. For the younger generation, the aging population
causes socioeconomic transformation changes in Japan in the long run. Japanese society
adheres to traditional values that the eldest son is responsible for caring for his elderly parents
(ERI, 2020). This phenomenon is, of course, increasingly causing socioeconomic problems
for young people. As we understand in shrinkanomics, where there is a decline in labour
conditions due to an older population, the younger generation has to work hard to increase
the economy's productivity. Not only that, but they also have demands on their families as
they have to care for their family members most of the day, and their only career options are
working part-time or taking night shifts (BBC News in Harth, 2020). It also means they lack
social life because they have no time for friends or the prospect of starting their own family
(BBC News in Harth, 2020). Alternatively, for those with a family, Japan also has a tradition
of three generations (grandparents, parents, children), where husband and wife care for both
parents and children.
In addition, because many older people are influential in the political field, national
policies will pay more attention to social welfare programs, such as increasing health
expenditures and expanding health facilities and pensions. This phenomenon will provoke a
wave of protests from young people who threaten the unity or "Wa (和)" inherent in
Japanese society (Hagihara et al. in Hoi, 2021). Wa (和) is a Japanese cultural concept that
implies peaceful unity and cohesiveness in social groups where members prefer maintaining
a harmonious community over their interests. Besides that, the increasingly aging society
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combined with the country's traditional employment practices, which heavily emphasize
seniority-based pay, can lead to wage stagnation for young workers and limited opportunities
for older workers. Today's statistics show that Japanese workers have not received a wage
raise for 30 years (Toh & Jozuka, 2023). The gap between generations in terms of
government fiscal policy and traditional business employment practices threatens the
socioeconomic life of young Japanese people.
On the other hand, the aging society creates higher inequality because the elderly
tend to have lower incomes (Nolan et al., 2014). As the economy slows down, the cost of
social security will increase because there will be a higher percentage of elderly people
retiring, while tax revenue will decrease due to a smaller number of younger people being
employed (Banas, 2018). In more specific terms, Japan's pension system faces financial
challenges due to its aging population. More adults are eligible for payment, which may make
it difficult for the government to provide adequate support to retirees in the future (CEPR,
2016). On average, the basic retirement allowance in Japan is ¥46,000, which is insufficient
to sustain a comfortable life (Siripala, 2023). In 2019, Japan conducted a poverty line survey
which found that a minimum annual income of around $10,000 is needed to buy essential
daily necessities.
However, individuals over 65 receive only an annual basic pension of around $6,000
or $460 monthly, insufficient to cover their day-to-day expenses (Siripala, 2023). Also,
620,000 people aged 65 and over do not receive pension benefits. In addition, according to
the OECD's 2019 Pensions at a Glance report, the poverty rate for individuals over 65 in
2015 was 22.3% for women and 16.2% for men, which shows the increasing poverty among
elderly Japanese women (Zhou, 2022). Therefore, the aging society in japan provokes
socioeconomic inequalities problems that further deepen the gap between generations.

Social Issues: Healthcare Problems

The most salient social problem indicated by the shrinking population in Japan is the
problem of healthcare. Japan has a shortage of caregivers to meet the greater demand for
medical care. Older populations are more likely to experience chronic health conditions like
cancer, heart disease, and cerebrovascular disease. These conditions are challenging to
manage and therefore require specialized medical support. However, healthcare
professionals, including doctors, nurses, pharmacists, physicians, and dentists, are shrinking,
particularly in rural areas. The Ministry of Health, Labour and Welfare of Japan (2022) has
warned that this nation will face a nearly 1 million staff shortage by 2040. Only 9.74 million
workers will be available, while the demand for them is 10.7 million. More and more of the
dwindling young population want to achieve a work-life balance and are thus reluctant to
become healthcare professionals. There is a heavy workload they have to work, including
long hours, a stressful environment, low pay, and a high risk of catching the virus (Ryall,
2022). These working conditions worsened during the pandemic in 2019. Consequently,
medical care is not inclusive for people, especially for the most vulnerable, who have limited
access to healthcare, lack information about available services, live in rural areas, and face
transportation difficulties.
[26] Japan’s Aging Society: A Challenge to Japan’s
Diversity & Social Inclusion

Furthermore, health workforces in Japan have been relatively gender biased. There
is a deep-seated gender bias as fewer women than men attend medical school for professional
training (Honda et al., 2022). This bias is not unpredictable since the World Economic
Forum’s 2022 Gender Gap Index shows that Japan ranked 116th among 146 countries
(Statista, 2023). With the overall gender gap index reaching 0.65 points, Japan is at the bottom
of the East Asia and Pacific group, far behind the other G7 nations. The assumption that
women cannot devote time to professional careers justifies the underrepresented female
physicians. However, despite the minority representation in paid professional careers,
women still carry most of the unpaid work. The growing demand for elderly caregiving and
the dwindling number of professional caregivers put families in overwhelmed situations.
Japan traditionally emphasizes the need for home and community-based care (Kingston,
2014). By default, women fulfill this need. They take 85% of caregiving tasks, and even 35%
of them need to quit their jobs (Kingston, 2014). Therefore, healthcare problems in an aging
society are also an issue for specific gender as there are expected gender roles.
In a super-aging society, another social problem also arises from the issues of funding
in healthcare. The public health insurance systems, which are Employment-based Health
Insurance, Region-based National Health Insurance, and Health Insurance for Seniors aged
75 years and over, provide most medical services in Japan (Fukawa, 2017). More elderly
people mean higher healthcare costs, while the amount of taxpayer and investment funds
shrank. Fukawa (2017) shows how the aging rate increased from 7.1% in 1970 to 26.6% in
2015, while National Medical Expenditure as a percentage of GDP only increased from
about 3% to nearly 8% during the same period. Before the 2019 pandemic, the government
had budgeted ¥15 trillion (15% of total spending) for healthcare and nursing, excluding fees
charged under the public health insurance scheme (Kunitachi & Onomichi, 2019).

Table 1. Long trends of population and medical expenditure in Japan.

Population National Medical

Year Expenditure
Total (million) 65+ (%) (%GDP)

1970 103.7 7.1 3.3

1980 117.1 9.1 4.8

1990 123.6 12.1 4.6

2000 126.9 17.4 5.9

2010 128.1 23.0 7.8

2015 127.1 26.6 7.9

Note. Adapted from Elderly Population Projection and Their HealthExpenditure
Prospects in Japan (Fukawa, 2017)
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To curb the burden on working-age people, Japan decided that individuals 75 or

older with an annual income of at least ¥2 million must pay 20% of their medical fees, up
from the previous “10-percent” policy (Fujita, 2020). It is estimated to ease younger people's
burdens by ¥88 billion. However, this is not a panacea for Japan's funding being not ready.
The reason is, with limited funding, Japan's healthcare system is still primarily focused not
on prevention but on the treatment of acute illness and injury, which mainly benefits the
elderly population. Therefore, the healthcare system in super-aging Japan is not inclusive.

Evaluation: An Evaluation of Japan’s Government’s Policies on Inclusive Society

Society 5.0: Policy during Shinzo Abe

Society 5.0 is a digital transformation program initiated by the Japanese government
cabinet in the 5th Science and Technology Basic Plan as a future Japan aspires. The previous
Japanese prime minister presented the concept of Society 5.0—Shinzo Abe—as one of
Japan's economic strategies at the annual meeting of the World Economic Forum in 2019.
Society 5.0 is Japan's aspiration to build a human-centred society, namely an inclusive society
that can balance economic progress and solve social and environmental problems with
technology that integrates cyberspace and physical space (Deguchi et al., 2020).
At least two main underlying issues drive the ambition of the Society 5.0 policy. The
first is to solve the main social problems in Japanese society today, namely the shrinking
workforce and the increasing elderly population (Audrey & Paksi, 2021). The growth of the
elderly population leads to high demand for care for the elderly population and increases the
cost of medical and social security for the Government (Ashfina, 2019). Thus, the initiation
of Society 5.0 is crucial in providing adequate technology for health services. Technological
advances in Society 5.0 will create Artificial Intelligence (AI)-based medicine that can
improve health support services into an integrated system that individuals can utilize to
manage their own life and health data deposited into big data. Second, Society 5.0 is also
present in response to the decline in the workforce population, which has exacerbated the
situation of Japan's economic stagnation. Based on the Nikkei Asia survey, 39.8% of Japanese
people feel pessimistic about improving economic conditions, and only 7.8% of respondents
believe the economy will improve for the remaining period (Ashfina, 2019). Therefore, PM
Shinzo Abe at that time introduced the Society 5.0 policy, a technology that includes AI and
robots will be present to overcome labour shortages and is projected to do low-labour jobs
such as construction and infrastructure to minimize the risk of accidents.
However, even though the Japanese Government projects the Society 5.0 policy to
overcome societal challenges and create an inclusive society through digital transformation,
there are currently still numerous small businesses in Japan that need more IT systems and
continue to rely on manual labour alongside digital processes. Society 5.0 remains largely
theoretical for small cities in Japan, exacerbated by the challenges posed by the Covid-19
pandemic in distributing resources evenly across the country in the past two years (Audrey
& Paksi, 2021). Therefore, Society 5.0 has only been felt in Japan's major cities.
[28] Japan’s Aging Society: A Challenge to Japan’s
Diversity & Social Inclusion

A New Capitalism: Policy during Fumio Kishida

Fumio Kishida, the current Prime Minister of Japan, has proposed a new form of
capitalism that focuses on increasing wages, promoting innovation, and achieving sustainable
growth by investing in human capital and infrastructure. His vision for "new capitalism" also
involves addressing social and economic disparities to create a more inclusive society.
Kishida's emphasis on increasing wages and investing in education and training would be
aimed at reducing income inequality and improving access to opportunities for all members
of society. Similarly, his focus on innovation and sustainable growth would aim to address
the challenges of an aging population and shrinking workforce, while also creating new
industries and opportunities for economic development.
Japan's policy on the aging population has been evolving over the years, and while
the government has made some efforts to address the challenges of an aging population,
some have criticized the policy as insufficient. One of the critical points that we need to look
at is the healthcare system. Japan has one of the best healthcare systems in the world, which
has helped to prolong the life expectancy of its citizens. However, with an aging population,
the healthcare system is facing significant pressure. Japan has responded to this by increasing
healthcare spending and implementing policies that encourage healthy aging, such as exercise
and healthy eating. However, there is still room for improvement, particularly in the area of
long-term care.
The other thing is about the social security system. Japan's social security system is
comprehensive and provides support for the elderly. However, some experts argue that the
system is not sustainable in the long run, given the declining working-age population. The
government has attempted to address this by increasing the retirement age and promoting
the participation of women in the workforce. Nevertheless, the policy on social security is
still controversial, with concerns about the adequacy of pensions and the affordability of
long-term care.

Recommendation: Additional Sustainable Policies for Japan to Tackle the Issues

Fortunately, the aftermath of shrinking population is gradual and predictable and
thus manageable (Kingston, 2014). The following paragraphs provide some policy
recommendations to respond to the economic, social, and political impacts of Japan’s
demographic crisis.

Additional Policies in Addressing Political Issues: Proactive Approach to Immigration

Japan's immigration policy has been a subject of debate in recent years, with the
country facing an aging population and a shortage of skilled workers. Here are some policy
recommendations to address Japan's immigration problem responding to the aging
population. First, Japan needs to promote cultural diversity. Japan has a relatively
homogeneous society, and many immigrants have difficulty adjusting to the culture. The
government should promote cultural diversity by providing support for foreign residents to
learn Japanese language and culture, as well as encouraging Japanese citizens to be more
welcoming of immigrants. Second, increase the number of skilled worker visas. Japan needs
to attract more skilled workers to fill the labour shortages in certain sectors. To achieve this,
Jurnal Transformasi Global [29]

the government should increase the number of skilled worker visas and make it easier for
foreign workers to obtain them. This would help bring in highly qualified workers, including
IT professionals, engineers, and medical personnel. Third, simplify the immigration process.
The immigration process for foreign workers can be complex and time-consuming, which
discourages potential candidates from applying. The government should streamline the
immigration process and make it more user-friendly, especially for highly skilled workers.
Fourth, address social integration. Immigrants face significant challenges when it comes to
social integration, such as finding housing, education, and healthcare. The government
should create programs to support immigrants in these areas and ensure that they have access
to the same services and opportunities as Japanese citizens. Overall, Japan needs to
implement a more comprehensive and welcoming immigration policy to address its labour
shortages and aging population. By taking a proactive approach to immigration, Japan can
ensure that it remains competitive on the global stage and continues to thrive economically.

Additional Policies in Addressing Economic Issues: Enhancing Public-Private Partnership

to Promote Inclusive Innovation
The Japanese government has taken a multi-faceted approach to address the issues
associated with the generation gap in the workforce, including policies focused on work-life
balance, employment, social welfare, and economic growth. They have implemented various
policies to address the issues associated with the generation gap in the workforce and the
challenges faced by younger and elderly workers, like promoting work-life balance, increasing
access to affordable housing, and reforming the pension system in order to address the issue
of insufficient pensions for the elderly. Japan's Society 5.0 policy that aims to create a "super-
smart" society by integrating various technologies also has the potential to bring about
various benefits. However, it is unlikely to be a complete solution to the complex issues
associated with the generation gap in the workforce in Japan.
Therefore, the authors offer an additional policy to enhance the Japanese
government's policies further. This policy offers a recommendation that not solely focuses
on the government's efforts and policies to address the issues but also on the private sector's
role in addressing the issue, which is enhancing public-private partnerships to address the
issues associated with the generation gap in the workforce. Firstly, by bringing together
government, industry, and civil society organizations, public-private partnerships can help to
identify and prioritize the most pressing issues related to the generation gap in the workforce.
Through collaborative efforts, these partnerships can develop strategies and initiatives to
address these issues in a coordinated and effective manner. In terms of the burden on young
Japanese people to be economically responsible for both their parents and new families,
public-private partnerships can work to create new and innovative social safety nets and
support systems that assist families in need. Second, to address wage stagnation for young
workers, public-private partnerships can work to support the development of new industries
and sectors that offer higher-paying and more secure jobs, for example, focusing more on
green jobs.
Then, to address the issue of insufficient pensions for the elderly, public-private
partnerships can develop new pension plans and social security systems that help ensure
[30] Japan’s Aging Society: A Challenge to Japan’s
Diversity & Social Inclusion

retirees' long-term financial security. Finally, to address poverty among the elderly, especially
women, public-private partnerships can work to develop new programs and initiatives that
provide support and assistance to vulnerable populations. Public-private partnerships can be
critical in addressing the complex issues associated with the generation gap in the Japanese
workforce. Through collaborative and coordinated efforts, these partnerships can help to
create more inclusive and productive workplaces that benefit workers of all ages and
contribute to Japan's economic growth and social well-being.

Additional Policies in Addressing Social Issues: Strengthening The Home and Community-
Based Care System
The super-aging society in Japan is facing several social problems, particularly related
to the healthcare system. The solution to this issue must be emphasized in strengthening "the
home and community-based care system" (HCCS). The implementation of HCCS relies on
the pool of active citizens, which has limited funding and expertise. Women are also expected
to run this system. The existing HCCS needs to be more effective and, thus, needs
improvements.
The government should establish a stronger HCCS at the local level in the following
ways. First, integrating the people in need, volunteers, NGOs, profit-oriented care services,
representatives of medical institutions, and governmental actors. By integrating these actors,
all people in need can deliver their needs and be accommodated appropriately. Second,
gender mainstreaming in making public policies of HCCS. Women and their thoughts are
involved in the policy-making process so that HCCS is not male-oriented but can seek win-
win solutions in the distribution of tasks. Third, the development of technology and
information to facilitate the implementation of HCCS. For example, HCCS must be
complemented by utilizing big interconnected data. There is also a health application for
online consultation services, drug purchases, medical check-ups, and other monitoring and
evaluation functions. Fourth, strengthening HCCS by spending on efforts to construct
healthy lifestyles, such as exercise, healthy eating, no smoking, no alcohol, and others.
Healthy living habits are more effectively carried out at the community level.
By strengthening the role of a “home and community-based care system,” people
will have an active community where the burden of HCCS is not only on women. In addition,
HCCS also fills the gaps in the need for more procurement of preventive health systems
which is more inclusive for the working-age population.

CONCLUSION
This paper concludes that Japan's aging society has a significant impact on the
political, economic, and social inclusivity of Japan's society. The authors' analytical
framework, shrinkanomics, viewed that the older and smaller population directly impacted
the labor force (national or foreign labor), market, and productivity, particularly in industries
that rely on laborers, such as healthcare and social service. Through this framework, the
authors analyze three issues. These are political issues, economic issues, and social issues that
come as a challenge to Japan's inclusion and diversity because of the aging society.
Jurnal Transformasi Global [31]

Firstly, the political issues of strict immigrant policy in Japan. To address labor
shortages as the impact of an aging society, the government has been increasing the number
of foreign workers allowed to work in Japan. However, this has led to political tensions and
debates over immigration policy due to concerns about the impact on Japanese culture and
ethnic homogeneity. Second, the economic issues of the gap between generations. For the
younger generation, the aging society causes socioeconomic problems. They must work hard
to increase productivity, care for their family members, and have limited career options. For
the older generation, Japan's pension system faces financial challenges due to an aging
population, which may make it difficult for the government to provide adequate support to
retirees in the future. Third, the shrinking population in Japan has highlighted two significant
social issues: healthcare and gender participation. Japan is facing a shortage of healthcare
professionals to meet the growing demand for medical care, and unpaid carers for elderly
population in Japan have been relatively gender biased.
After discussing the problems, the authors evaluate Japan's policy on inclusive society
during the previous leadership of prime minister Shinzo Abe and the current government
Fumio Kishida. The authors argue that the Society 5.0 policies under Shinzo Abe are
comprehensive policies that could promote diversity and inclusion as the impact of the aging
society. However, more projects on the inclusivity between big and small cities must be
enhanced. Meanwhile, in Kishida, Japan has tried to address the challenges of an aging
population, including improving the healthcare system and promoting healthy aging.
However, there are still concerns about the sustainability of the social security system, given
the declining working-age population.
Therefore, Japan's existing policies on diversity and inclusion, challenged by the aging
society, can be improved even better with the authors' recommendations. The authors
recommend that some additional policies be made based on the "Social Inclusive
Development" theory emphasizing the importance of inclusive policies and programs for
promoting social and economic development. To address the political problems impacted
by the aging society, promoting cultural diversity, increasing the number of skilled worker
visas, simplifying the immigration process, and addressing social integration challenges need
to be done. By taking these steps, Japan can attract highly skilled workers and remain
competitive in the global economy. More importantly, maintaining good relations among the
people to ensure political stability. Second, to address the socioeconomic issues that Japan is
facing, the effort to enhance public-private partnerships to promote inclusive innovation
policies can be a leeway to solve structural economic inequality among generations. Finally,
the authors argue that the government should establish a more robust home and community-
based care system (HCCS) locally to address social issues. This HCCS should be done by
integrating all the stakeholders and people in need, promoting gender mainstreaming in
making public policy, developing technology and information, and spending more funds to
construct healthy lifestyles at the community level.
Like many other countries, Japan needs inclusive social development to address
social, economic, and environmental challenges and promote sustainable development.
Ensuring inclusive social development can address the challenges of diversity and inclusion
of Japanese people.
[32] Japan’s Aging Society: A Challenge to Japan’s
Diversity & Social Inclusion

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