It’s probably a good thing in the long run. Like how the plague in Europe actually gave the serfs more rights. Since it gave the workers more leverage since there was more demand for workers than they were in supply.
Japan is overcrowded. Sure villages are bleeding dry, but in the cities people live in tiny apartments that cost too much. And lots of people do very meaningless soul crushing jobs for little pay, jobs that are already automated in the rest of the world. Like even a job that can be replaced by a simple sign. Seriously when I was in Japan I saw people at the station that were just pointing passengers towards the exit. And it wasn’t even an emergency situation, just a regular workday.
Sure a shrinking population is bad for the economy, but for the people it will mean that housing prices will go down and pay will go up and they will have more rights in the long run.