Labor shortage, Japan opens immigration

Opening up to immigration is seen as a necessary solution to help maintain growth for Japan's aging economy.

Japanese Prime Minister Shinzo Abe is trying to combat the alarming population decline. Solutions considered by the government include promoting the participation of robots and productivity-enhancing technologies, increasing the participation of women in the workforce, and even opening up a small number of foreign workers. However, this is not enough and Prime Minister Abe needs to try harder, especially on the issue of immigration.

Prime Minister Shinzo Abe's administration has proposed easing immigration restrictions on foreign workers. Source: Reuters

Japanese companies say they are having trouble recruiting, and the situation shows no signs of improving. Government researchers predict Japan’s population will shrink by nearly a third by 2065, with 40% of the population being elderly. The ratio of working-age people to those over 65 will fall to 1.3, down from 2.3 in 2015.

Current government policies have pushed the birth rate higher, but the long-term figure (1.44 children per woman) is still below replacement. To maintain its current population, Japan would have to allow more than half a million immigrants a year, according to researchers. In its isolated and homogeneous society, this increase could create a new order.

Opening the door to immigration is considered a solution to maintain growth for an aging country like Japan. Photo: KAZUHIRO NOGI

That’s not to say that things can’t get better. Despite his many scandals, Prime Minister Abe remains Japan’s most powerful leader in recent years. He has few rivals within or outside the Liberal Democratic Party (LDP), and can make bold decisions when his approval ratings are high enough – like rethinking Japan’s military orientation and pushing for the TPP.

Prime Minister Abe needs to convince the government and the public that increased immigration is necessary. Until now, immigration to Japan has been disguised in many ways – such as training programs for low-skilled workers. But a properly supervised foreign worker program is needed, and it must include permanent residency. The government could also invest more in language training programs and other measures to help new immigrants.

Japan could also welcome international students who want to stay and work after graduation, encouraging skilled workers. In some cases, lowering entry barriers would be important. Addressing the nursing shortage, for example, would involve redesigning exams that are disproportionately difficult for foreign nurses.

A broader cultural shift is also needed. Japan must accept a less exclusive outlook and encourage more use of English in business. If the influx of new workers, as feared, disrupts the culture of Japanese companies, that is not a bad thing. Mass migration is putting pressure on wages and breeding complacency.

If the country fails to overcome its demographic challenge, decline is inevitable. And to maintain its prosperity, Japan needs to change.

According to VNE