Maybe the "problem" is actually a solution

From Actually, Japan has changed a lot by Noah Smith.  The subheading is The 2020s are not the 1990s.

The context is:

Reading the widely discussed farewell essay by the BBC’s outgoing Tokyo correspondent, Rupert Wingfield-Hayes, I felt a deep sense of frustration. The veteran journalist summed up his impression of Japan — where he has lived and worked since 2012 — as one of stagnation and stasis, declaring that “after a decade here I have got used to the way Japan is and come to accept the fact that it is not about to change.”

And yet as someone who has lived in Japan, and who has gone back there for about a month out of every year since 2011, and who has written fairly extensively about the country’s economy, I can tell you that it absolutely has changed, in important and highly visible ways.

It is a worthwhile read, but the point I want to pull out, and having little to do with Japan per se, is this:

For example, I think he’s absolutely right to identify gerontocracy as Japan’s fundamental problem. Wingfield-Hayes points to political gerontocracy — elderly voters maintaining the power of an elderly, ossified political class — but I think an equally or even more important problem is corporate gerontocracy. The near-universal practice of seniority-based promotion, combined with low startup rates and population aging, has led to an ossified class of corporate executives and managers who would rather preside comfortably over declining little empires than embrace new technologies and business models and take new risks. That in turn has caused Japanese companies to fall behind foreign rivals as they miss technological revolution after revolution — microprocessors, smartphones, semiconductor foundries, battery-powered cars, etc.

Wingfield-Hayes is also right to decry the low-productivity menial jobs that Japan has in abundance. Hiring 6 people to do the job of 2 is sadly common in Japan, and it’s a big reason why Japanese people earn such low and stagnant wages. The heart of the problem is the lack of new high-growth companies, which is due to deficiencies in R&D, lack of late-stage startup funding, and (especially) Japanese companies’ failure to tap export markets in lieu of their shrinking home market.

Smith and Wingfield-Hayes are both unaccepting of low-productivity menial jobs.  Should they be?

Everyone is afraid of the job losses which come with innovation.  Everyone bemoans the winner-take-all economy and the inequalities that yields.  Everyone worries about aging demographics when people are able to do less.  Everyone frets that people are being marginalized because of some combination of lower cognitive ability, awkward personalities, poor behavioral traits, and inability to set reasonable goals in uncertain conditions.  

The top quintile will almost always do well.  The bottom quintile will often get taken care of in some barely adequate way.  But increasingly, the economy hums along requiring ever fewer people.  Labor force participation rates are falling around the world.  In some ways this is good.  More output with fewer people is a definition of efficiency.

On the other hand, in terms of society, a small productive class supporting a rising class of people unengaged with the economy is inherently unstable.  It is not a desirable outcome.

I have mentioned before that in some ways we need to have the social and cultural capacity to both respect and enjoy people engaged with integrity in low productivity employment.  

It is far more efficient to have a lawn service with a five man crew who sweep in, cut  the grass and blow the leaves and departs.  Thirty minutes, seventy-five dollars, done.  But maybe we ought to tolerate and encourage the individual who spends the whole day cutting and raking by hand.  It is low efficiency but it  provides higher employments for low capacity individuals.  

I don't know what the answer is and am no advocate for make-work but I do recognize that there is some dim interrelationship between maximal productivity and social stability.  

And I wonder whether what Smith and Wingfield-Hayes are criticizing might, in some way, be an aspect of providing jobs to those who would otherwise separate from society with nothing to do.