Foreign Labor in Japan: Pending Changes to Loosen Rules in Favor of Skilled Workers

Facing the workforce shortage, Japan is considering foreign labor as an option.

Foreign Labor in Japan
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Japan is known as a country with one of the tightest immigration policies around. While their policies are not unilateral towards all countries, the process of getting a work visa in Japan can be quite complicated.

Japan relies on the homogeneity of its workforce to establish highly productive work practices and good synergy in workplaces. Also, Japanese politics still view immigration as something of a taboo. This isn’t really surprising due to recent immigration issues faced by the countries in the EU and USA. Loose immigration rules tend to bring more than a few negative issues with them, most notable being terrorism, ethnic tensions and a bigger wealth gap between natives and immigrants.

On the other hand, Japan is also facing an increase in demand for high skilled laborers and it seems that this fact is impacting some of the government’s decisions.

Reuters Corporate Survey

According to a recently conducted Reuters Corporate Survey, most big and medium-sized businesses support the loosening of immigration policies in order to gain access to highly skilled labor workforce. If we take a look at the numbers this survey yielded such support becomes even more obvious.

Namely, as many as 60 percents of medium-sized companies show support for more open immigration policies. Around 57 percent of them actually employed foreigners at the time the survey was conducted.

Still, we should keep in mind that the number of companies supporting the intake of unskilled workers into the country was as low as 38 percent.

The numbers on this are fresh as the poll was conducted between Aug 1st and Aug 14th, 2018. The polling was conducted by Nikkei Research and it encompassed 483 businesses all of which surpassed a capital of a $9,000,000 minimum. The polling was conducted anonymously.

Another poll from March 2017 showed an increased willingness of Japanese companies to hire foreign laborers. The numbers showed that 57 percent of companies are willing to hire skilled foreign labor (an increase of 5 percent) and 38 percent are willing to hire unskilled labor from other countries (an increase of 4 percent).

All these results are quite in line with the current plans of the Japanese government to implement some changes to labor immigration policies announced by Japanese Prime Minister Shinzo Abe back in February 2018.

The current state of things is somewhat dubious:  since Shinzo Abe has taken the position, the number of foreign employees has doubled numbering 1.3 million.

Pending changes to the foreign labor policies

At the core of these governmental policy changes are the expansion of visa categories as well as the implementation of less strict rules. Currently, sectors with the most severe labor shortage are as follows:

  • Technology
  • Construction
  • Care
  • Transport
  • Agriculture

Still, the Prime Minister Shinzo Abe also stated that the so-called “Immigration Policy” will never be accepted. The professionally skilled laborers will be given a working permit for a limited time span and no privileges of being accompanied by family members.

This puts Japan in a tight spot since this kind of changes in policies are not guaranteed to make Japan a more desirable destination for the highly skilled professionals.

The current state of things is somewhat dubious: since Shinzo Abe has taken the position, the number of foreign employees has doubled numbering 1.3 million. Still, this number only rounds up to less than 2 percent of the total labor force in Japan. When compared to other countries like Britain (10 percent) and Singapore (38 percent) this is a very low influx of foreign labor overall.

A lot of officials are still concerned about this influx especially when European countries are continuing to rethink their lax immigration policies. The European situation is a unique one and their past policies have cost them a lot of instability and an increase in well-fare costs. Still, the concerns are legitimate.

The Japanese public is at best split down the middle when it comes to this issue. When the question of whether the labor shortages resulting from the population decline should be resolved through foreign laborers comes up, a lot of people would agree that it is a good idea. However, the large-scale immigration is still viewed as a very negative thing, especially by the older generation of Japanese people.

Summing up

The Japanese government is making moves to facilitate the acquisition of working permits for highly skilled foreign laborers but some severe restrictions will probably still be a major barrier for popularizing Japan as a good opportunity for them. The question on everyone’s minds is “Will it be enough to make a significant change?”.

Japan’s unemployment rate is at an all-time low: the country’s unemployment index is only 2.4 percent. Furthermore, the ratio of job offers to job seekers rose to 1.56 which is the highest number since 1974. The situation is even more severe in the care industry where that index goes as high as 4.04 due to its severe working conditions and low wages.

The high requirements that Japanese companies have for their foreign laborers are mostly related to cultural and language barriers. There is a working model of hiring white collar workers who were educated in Japan and thus lowering the discrepancy between their own workforce and the part of it that was “imported”. Still, this isn’t enough, it seems, to popularize Japan as a working destination since the laborers find a lot of these policies to be restrictive.

On the other side of things, the Japanese government has some legitimate concerns when it comes to large-scale immigration and the fact that it tends to go rampant if continuously left unchecked.

It seems that this will be a problem that no single policy change will resolve. The whole thing will be a process that will bring gradual change, hopefully satisfying both sides. These kinds of issues take a lot of time to resolve due to their complexity. But it seems that Japan is going in the right direction – carefully.

Today’s “otsumami” – a bite size snack:

Let’s take a dive into the complex subject that is the Japanese foreign labor issue.

What do you think?

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