Japan's "elderly single-person households" have surged, and the number of bankruptcies of elderly care institutions has reached a new high

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2024-07-07 17:32Published on the official account of Jiangsu Yicai

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In the first half of 012024, the number of bankruptcies increased by 22.0% year-on-year to 4,931, increasing for the third consecutive year and hitting a new high since 2014.

02 Among them, the number of bankruptcies of elderly care institutions reached 81 in the first half of this year, the highest value since the relevant survey in 2000.

03According to the Tokyo Institute of Commerce and Industry, labor shortages and rising utility costs are the main reasons for the bankruptcy of elderly care facilities.

04Due to the uncertainty of the labor market and rising prices, the Tokyo Institute of Commerce and Industry predicts that bankruptcies of elderly care institutions in Japan will continue to rise in the future.

05At the same time, 46% of single-person households in Japan are elderly single-person households, and the population over 65 years old accounts for about 46% of the total number of single-person households.

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The challenge to Japanese society from the acceleration of aging continues.

According to data released by Tokyo Shoko Research on the 5th local time, the number of bankruptcies of enterprises in Japan (debts of more than 10 million yen, about 450,000 yuan) in the first half of 2024 will be 4,931, an increase of 22.0% over the same period last year, an increase for three consecutive years, and a high level since 2014 (5,073).

It is worth noting that among the bankruptcies in Japan, the survey by the Tokyo Institute of Industry and Commerce also showed that the number of bankruptcies of elderly care institutions in Japan recorded a new high in the first half of this year, which has not been seen in the past. According to the data, 81 elderly care facilities went bankrupt in the first half of this year, the highest number since the survey was conducted in 2000. In the same period of 2020, it was 58.

The number of bankruptcies of elderly care facilities in Japan has reached a new high

In terms of categories, 40 of Japan's bankrupt elderly care institutions provide home care services, 25 provide daycare services, and 9 provide live-in care services. In addition, about 80% of elderly care providers said they were not making a good profit.

Regarding the surge in the number of bankruptcies of elderly care facilities, the Tokyo Institute of Commerce and Industry said that labor shortages and rising costs of various public utilities were the main factors. In particular, the agency highlighted that some elderly care facilities in Japan have fallen into a vicious cycle of "poor profitability and thus understaffing".

Teikoku Databank, a corporate credit research firm, said that more and more companies are inclined to alleviate the dilemma of short-staffing by offering higher compensation, and for employees, they have begun to shy away from those that cannot offer higher compensation.

According to the Tokyo Institute of Industry and Commerce, due to the uncertainty of the labor market and the rise in prices, the bankruptcy of elderly care institutions in Japanese society will continue to rise in the future.

In the overall situation, the increase in the number of bankruptcies was cited by the Tokyo Institute of Commerce and Industry as a result of a lack of manpower and high raw material prices. Among them, in the first half of this year, 145 bankruptcies due to lack of manpower reached 145, about 2.2 times that of the same period last year and a new high for the same period since the investigation began in 2013. Bankruptcies due to high prices, including rising purchase costs, increased by 23.4% to 374. In addition, 327 businesses went bankrupt because they were unable to repay actual interest-free and unsecured loans in response to the pandemic.

In 2023, data from the Tokyo Institute of Commerce and Industry showed that the number of bankruptcies in Japan increased by 35.2% from the previous year to 8,690, exceeding 8,000 for the first time in four years since 2019. According to the agency's statistics, the number of bankruptcies in Japan has increased for the second year in a row, the highest rate in 31 years since the collapse of the bubble economy in 1992. Total liabilities increased by 3.1% to 2.4026 trillion yen (about 117.7 billion yuan).

Given that the number of bankruptcies of Japanese companies in the first half of this year has already exceeded the same period last year, and with the end of the Japanese government's financing support measures and the rise in market interest rates, the burden of interest payments will increase in the second half of the year, and more companies may find cash flow difficulties. According to the Tokyo Institute of Industry and Commerce, the number of bankrupt companies in Japan will exceed 10,000 this year, which is a high probability event.

Forty-six per cent of single-person households are elderly single-person households

For Japan, the "world's oldest" country, the surge in the number of bankruptcies of elderly care facilities in response to the acceleration of aging is not an optimistic sign.

On July 5, Japan's Ministry of Health, Labor and Welfare released the results of the "National Livelihood Basic Survey", showing that as of June last year, the number of households with children under the age of 18 in the country was 9.835 million, falling below 10 million for the first time and the lowest value since the relevant survey began in 1986. In the first survey in 1986, the proportion of "families with children" was 46.2%, and since then it has been decreasing year by year.

The data also shows that the number of "single-person" households in Japan increased to 18.495 million, accounting for 34%. Among them, the number of "elderly single-person" households over 65 years old is 8.553 million, accounting for about 46% of the overall number of "single-person" households.

According to data released by the Japanese government in April this year, the number of people over 75 years old in Japan increased by 713,000 to more than 20.07 million, exceeding 20 million for the first time, accounting for 16.1% of the total population, the highest proportion in years. At the same time, the proportion of the population under the age of 14 was 11.4%, the lowest on record. In addition, the number of family members in Japan continues to decline, and the average household size is expected to fall to less than two in 2033.

Against the backdrop of an accelerating aging population, three major organizations, the National Council of Nursing Care Facility Managers, the Nursing Human Resources Policy Research Institute, and the Japan Home Care Association, issued warnings last year. According to a survey conducted by the three major organizations, about 30% of nursing care facilities in Japan are in danger of bankruptcy or closure against the backdrop of high prices and utility bills in Japan. In the care industry, there has been an increasing number of cost-cutting through layoffs or lower pay.

According to a 2022 survey conducted by the Center for the Stability of Long-term Care and Labor, 66% of nursing care facilities in Japan are understaffed, and there is a shortage of home-based nursing staff. The latter has a shortfall of 83.5 per cent. In addition, a quarter of the home-based caregivers are over 65 years old, and there is a significant trend of aging caregivers.

In order to stop the loss of caregivers, Japan's Ministry of Health, Labor and Welfare has decided to raise the wages of caregivers from June this year, and if nursing care facilities introduce equipment robots, they will provide new compensation. According to the Japanese government's estimates, by 2040, the number of elderly people will be close to peak, and there will be a shortage of about 1 million people in the medical and nursing fields in Japan.

(This article is from Yicai)

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