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 other 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 do more, especially on the issue of immigration.

Prime Minister Shinzo Abe's administration proposes easing immigration of foreign workers. Source: Reuters

Japanese companies say they are struggling to recruit people, and the situation is unlikely to improve in the future. Government researchers predict that 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 has fallen 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 in more than half a million immigrants each year, according to researchers. In its isolated and homogeneous society, this increase could create a new order.

Opening up to immigration is seen as a solution to maintain growth for an aging country like Japan. Photo: KAZUHIRO NOGI

That’s not to say that things can’t improve. Despite a string of 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 one that includes 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 require 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 is feared to disrupt the culture of Japanese companies, that is no 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