The Effects of the Baby Boomers’ Mass Retirement on Companies and YoungPeople
Nahomi Shirakawa
Kinki University Technical College

I am going to talk about the mass retirement of the baby boomers and the effects oncompanies and young people.

Analysts agree that a large number of workers are retiring in the period 2007-9.
However, they disagree about how many. The most conservative estimate is given by
Daichi Life who says that little over a million will retire in this period. Daiwa Shoken
says about four million will retire. Some English-language news sites have even higher
estimates: about six million (eight percent of the workforce) according to the BBC andabout 7 million (ten percent of the workforce) according to Japan Today.

Why is there such a big difference? It is very difficult to estimate what the babyboomers and companies will actually choose to do. We can’t know how many
companies will decide to keep their workers and we can’t know how many workers will
decide to keep working or retire.

What will be the effects for companies and young people?

Companies will face many opportunities and challenges. Firstly, they will face the lossof many high skilled workers. These workers helped Japanese companies to recoverfrom the Second World War and develop Japan into the world’s second largest
economy. Companies will struggle to replace their knowledge and skills. This meansthat the quality of the labour force will decrease. However, Professor Kingston fromTemple University in Tokyo blames the baby boomers for the Japanese recession in the1990s. They have also been described as “the generation waiting for instructions” by
Terrie Lloyd in Japan Today. However, I think that they will be missed by theircompanies, because they usually work hard and especially do not give up easily.

Secondly, companies face an uncertain financial future from the loss of their workers,
because they will need to pay big retirement bonuses. The total cost of retirement
bonuses will be about ten trillion yen, according to Risako Suzuki in her university
graduation paper. She also says that many small and medium sized businesses will gobankrupt. Larger companies are represented by Nippon Keidanren, this is called theJapan Business Federation in English. Nippon Keidanren asked their members to
calculate the average cost of retirement bonuses. Retirees will receive on average
between 19 and 25 million yen each. These numbers are high; however, companies willhire younger, cheaper workers to take their place. In 2004, young university graduates
earned, on average, two hundred thousand yen a month, compared to over six hundred
thousand yen basic income for senior workers according to Nippon Keidanren research.
This means that the youngest workers earn three times less than the baby boomers.
Unfortunately, I couldn’t find any research that shows the balance of costs forcompanies, between retirement bonuses, and a cheaper workforce. This would be aninteresting area to study.

Some young people worry about these mass retirements creating problems for us. Thisis mainly because there will be fewer workers paying taxes and pension premiums in
relation to the number of pensioners. However, I think this will be a big opportunity for
us to get skilled jobs.

We will also have good opportunities when we have jobs. My older brother works at an
outsourcing temporary staff agency. He has seen his business increase in recent years
and his company is continuing to do well. This means that his job has advanced quickly.
If they have skilled jobs, other young workers will also find that they can get promoted
quickly. I think that this is another benefit. We will have good opportunities to havemore responsibilities in our jobs.

In conclusion, this generation change will create a wave of opportunities for youngpeople. We need to catch this wave when it comes. This means that we must take ourchances, but we must also work hard. Especially, we should not waste time at college.