＜prologue＞
I started a blog called “The Baby Boomer Generation’s Miscellaneous Blog”（Dankai-sedai no garakutatyou:団塊世代の我楽多（がらくた）帳） in July 2018, about a year before I fully retired. More than six years have passed since then, and the number of articles has increased considerably.
So, in order to make them accessible to people who don’t understand Japanese, I decided to translate my past articles into English and publish them.
It may sound a bit exaggerated, but I would like to make this my life’s work.
It should be noted that haiku and waka （Japanese short fixed form poems） are quite difficult to translate into English, so some parts are written in Japanese.
If you are interested in haiku or waka and would like to know more, please read introductory or specialized books on haiku or waka written in English.
I also write many articles about the Japanese language. I would be happy if these inspire more people to want to learn Japanese.
my blog’s URL:https://skawa68.com/
my X’s URL:団塊世代の我楽多帳（@historia49）さん / X
Recently, the “2020 problem” in human resources has become a hot topic. This refers to the problem that the “Bubble Generation and Baby Boomer Junior Generation” (currently aged 44-53) will reach managerial age and their wage levels will reach their peak, but there will not be enough positions to fill them.
A similar thing happened during our time as the “baby boomer” generation, and I would like to look back at how we responded then and also consider how we should deal with the current “bubble generation/baby boomer junior generation.”
1. How to deal with the baby boomer generation
The measures taken for the “baby boomer” generation were as follows:
(1) “Encourage early retirement,” “encourage second careers,” and pay “extra retirement benefits”
(2) Lower wages for remaining “baby boomer” employees
(3) Separate “seconded” employees to affiliated companies from the main company and “transfer” them
(4) Reduce or eliminate employee benefits
I don’t know if this is the case in all private companies, and as an outsider I don’t know what it is like for public servants, but I’ll tell you my experience.
When I reached my first “retirement age” at age 55, my salary level had already been cut, including a reduction in bonuses, and my salary when I worked “full-time” at my second job was about 60% of what I had earned before retirement, and when I turned 60, partial pension payments began, so my salary was cut by another 20%, so it was just under half of what I earned before retirement.
Now I work 14 days a month as a “temporary employee,” but my monthly income is just enough for pocket money.
Compared to the past, when there were annual base increases and regular salary hikes, wage levels began to plateau or be cut quite early on after the collapse of the bubble economy（バブル崩壊）, probably around the time people were in their 40s.
The Plaza Accord of September 1985 led to a rise in the value of the yen. To combat the recession caused by the high yen, the Bank of Japan implemented drastic monetary easing, including lowering the official discount rate, which created excess liquidity and ushered in the bubble economy. The peak of the economy was when the Nikkei average hit an all-time high of 38,915 yen on December 29, 1989.
The bubble burst in 1991. The Ministry of Finance implemented a monetary tightening measure known as “total restrictions on land loans” in March 1990, and Bank of Japan Governor Mieno drastically raised the official discount rate to 6% in August 1990, putting a sudden brake on the economy. In 1991, the Land Value Tax Law was enacted, which decisively caused the bubble to collapse (crash), bringing about the “Lost 20 Years.” I believe that policy decisions should have been made to allow for a softer landing.
In this way, in the case of us “baby boomers,” our salaries were reduced and we were worried about receiving our future pensions, so each household tightened their finances and became frugal and cheap, and tried to save whatever extra money we had. As a natural result, deflation continued for a long time.
Meanwhile, the US Federal Reserve learned from the sudden collapse of Japan’s bubble caused by its failed policies and quickly responded with “monetary easing” when the Internet bubble began to collapse in 2000, which allowed the US economy to continue to expand smoothly.
2. How to deal with the Bubble Generation and the Baby Boomer Junior Generation
The age structure of the “Bubble Generation/Baby Boomer Junior Generation” is wider than that of the “Baby Boomer Generation,” so the total working population is greater than that of the “Baby Boomer Generation” at the same age. The following are some ways to deal with them:
(1) Corporate managers will strive to improve the labor distribution rate (raise wages for workers) by raising product prices and making the company profitable even if sales decline slightly. Companies that are currently performing well but are not paying wages commensurate with their performance will take the initiative in raising wages.
(2) After that, employees will be divided into “line employees” who will be given actual positions and “staff employees” who will only be given nominal titles until the age of 50.
(3) Since there is a limit to the number of substantive “posts,” nominally similar “titles” are given. Specifically, titles such as “Manager,” “Deputy Manager,” “General Manager,” and “Department Manager” are used. Wage increases for these employees will be lower. Once the company is profitable, it will raise wages further.
(4) For “line employees who are given substantial positions,” the company will continue to raise wages at the same pace as before or at a faster pace.
(5) This year is said to be the first year of lifting the ban on side jobs, but by allowing side jobs on a large scale, the company will be able to supplement the income of “staff employees who are given only nominal titles” and also provide the prospect of a “second career.”
In this way, instead of adopting the traditional personnel policy of suppressing total salary payments, I think the first priority for the company is to improve its profit-making structure by raising prices, etc. In reality, I think there are many companies that can “raise wages” even now if they do not insist on retaining internal reserves.
This is something I have been thinking about for a while, but I feel that it has been a long time since Japanese companies have kept the prices of Japanese products too low due to price wars with China and Korea, resulting in a corporate culture that does not adequately compensate workers. Shouldn’t it now be time to put the value of “Made in Japan” at the forefront and make a bold move to raise prices?
Currently, I think that salaried workers of the “Bubble Generation” and “Baby Boomer Junior Generation” are worried about wage plateaus and future pension payment postponements. Prime Minister Abe has taken bold steps, such as directly requesting the Japan Business Federation to raise wages, and the Bank of Japan has also set an “inflation target rate of 2%.” However, if corporate managers continue with their previous measures to suppress total wages, I don’t think the situation will improve.
Recently, the “labor share” (labor costs/added value) has remained at a historic low. It is natural that many salaried workers cannot feel the “good economy.” At this point, shouldn’t the managers of large companies go ahead and raise wages without worrying about the decline in business performance during their own term of office, and meet the expectations of salaried workers, the Prime Minister, and the Bank of Japan? Ideally, this would have an impact on small and medium-sized companies as well. I think it is time to turn the pinch of the “peak of wage levels for the bubble generation and baby boomer junior generation” into an opportunity.
And, as an aside, I think the Bank of Japan should immediately abandon its excessive “zero interest rate policy” and “negative interest rate policy(マイナス金利政策)” and gradually raise interest rates. Currently, the majority of depositors and banks are frustrated by the long-term continuation of “zero real deposit interest rates.” If they are aiming for a 2% inflation rate through increased consumption, I think they should adopt a flexible approach like the Federal Reserve in the United States and quickly make a policy shift.