As Japan looks to stimulate consumer spending through pay hikes, a glaring problem has emerged: Pay increases do not benefit pensioners much. Given Japan’s high proportion of retirees, encouraging older people to spend will be crucial if Japan is to escape its deflationary doldrums.
“I hesitate to spend boldly when I think about my future,” said a man his 70s in Yokohama, south of Tokyo. Although he is willing to spend on things like gifts for his grandchildren, he tends to avoid big purchases.
The elderly account for a growing share of personal consumption in Japan.
Monthly spending by households headed by people 65 and older averaged 211,780 yen ($1,450) in 2022, accounting for about 39% the national total. That is nearly double their share of around 23% in 2002. As Japan grays, the share of spending by the elderly has trended higher.