Poland is almost as rich as Japan now

Japan didn't stop growing. It ran out of workers.

Japan's GDP per person grew 24% in those 30 years, the second slowest of all 38 OECD members after Italy. Measured per person of working age, it grew 48%, as fast as Germany (49%).

The difference is who is working. In 1995, 70% of Japanese were aged 15 to 64. Today 59% are. Each worker carries more people, so output per head lags output per worker. Colombia is the mirror image: about the same growth per worker, but a population getting younger, so its output per person rose 64%.

Anyone who has spent a week in Japan has seen this without a single chart. The taxi driver in white gloves is often older than your parents. So is the man in the hard hat waving cars past a building site. More than half of Japanese aged 65 to 69 still have a job, and since 2021 employers have been legally asked to try to keep their staff on until 70.

Japan didn't stop working. It has fewer young people to do the work, and it has started, quietly, to bring them in: a record 3.77 million foreign residents lived in Japan at the end of 2024, about 3% of the population and still small by European standards.

Take the ageing away, and only Malta is ahead

Japan's ageing is no accident of one bad decade. Its birth rate has been low for two generations: in 2024 it fell to 1.15 children per woman, and fewer than 690,000 babies were born, the fewest on record. Outside the big cities you can see where that leads. The 2023 housing survey counted 9 million empty homes, one in seven, many of them inherited by children who live somewhere else.

Had Japan kept its 1995 share of working-age people, its output per person would be about 19% higher today. Put that Japan next to the six, and only Malta clears it. South Korea comes close; the rest are well short.

None of that makes the catch-up an illusion. Poland's output per person grew about 3.2 times over in 30 years, Lithuania's nearly 4 times. That is real growth by any measure. It just met a rival that was getting more productive while its workforce shrank.

The catch-up generation is ageing too

The share of Japanese aged 65 and over doubled, from 15% to 30%. South Korea started far younger, at 6%, and has more than tripled to 19%, faster than any other country here. The arithmetic that flattered the catch-up is coming for Korea next. Its fertility rate was 0.75 in 2024, the lowest of any country; Japan's, at 1.15, looks generous next to it.

The European six have their own version. Lithuania had 3.7 million people when it regained independence and about 2.8 million today, a loss of roughly a quarter, mostly to emigration, much of it young people heading west once the EU opened up. Catching up with Japan's output and avoiding Japan's demographics are two different races.

Not just six lucky countries

Picking countries because they caught up flatters the story, so here is every OECD member with more than 10 million people. South Korea, UK, Spain and Czechia moved past Japan. Nearly everyone closed part of the gap. Italy is the only one that fell further behind.

Richer on paper. Renting alone still hurts.

If you are thinking of moving to one of these cities, output per person is the wrong number. What matters is what a flat costs against what people there earn.

A one-bedroom takes 37 to 44% of an average local salary in the Polish, Czech and Lithuanian cities, and 53% in Sliema. The usual rule of thumb is 30%. Only Busan and Seoul come in under it. Tokyo is no escape either: a one-bedroom there takes 41% of average Tokyo pay.

The rent has caught up. The pay hasn't.

A one-bedroom costs $974 a month in Warsaw and $1,003 in Prague, against $866 in Tokyo and $979 in Berlin. But that flat takes 44% of an average salary in Warsaw and 44% in Prague, against 32% in Berlin. The flats are priced like the rich world now; local salaries are still on their way there.