The Impact of Japans COVID-19 Immigration Measures on the Inflow of Foreign Labor into the Country

Akinori Tomohara received his Ph.D. in Economics from Johns Hopkins University. Upon finishing his PhD, Tomohara served as a faculty member at the City University of New York (Graduate Center and Queens College) and the University of Pittsburgh. He has also worked as an economist at the University of California, Los Angeles Anderson Forecast. Currently, he is a Professor at Aoyama Gakuin University and a member of the Commission on Employment Policy for Foreign Workers, Ministry of Health, Labour and Welfare, Japan.
Kaito Komoriya CMC '22 interviewed Dr. Akinori Tomohara on April 3, 2022.
Photograph and biography courtesy of Dr. Akinori Tomohara.

How have Japan’s immigration policies on manual labor workers been impacted by COVID19? In particular, how have immigration policies on high-skill workers been impacted by the pandemic?

There are two approaches to sustainable economic growth in Japan. One is immigration. The other is innovation. However, the recent pandemic proves that growth through immigration is not
necessarily reliable. We cannot have people from foreign countries coming in now because of entry restrictions due to COVID-19. Given this, productivity improvements through innovation
have gained more popularity than immigration. This trend applies to both manual labor workers and high-skill workers.

What are the short-term economic consequences of the suspension of immigrant labor into Japan as a result of Covid? When do you anticipate Japan to open up again to foreign employees?

For the first question, the short-term economic consequence of the suspension of immigrant labor has been rising prices. Some industries rely extensively on foreign labor, so the suspension of immigrant labor has caused severe labor shortages. When we do not have enough workers, we must increase wages to attract more workers. For example, many foreign laborers engage in agriculture and harvesting vegetables, such as potatoes, tomatoes, and cabbages. However, with restrictions against foreign workers entering due to COIVD-19, many farmers struggled because they simply did not have enough people to pick and harvest those vegetables. To address this, farmers tried to replace foreign workers with Japanese part-time workers. Usually, Japanese workers are reluctant to work in such manual labor on farms, so in order to get these people, farms had to pay them more. These costs eventually led to increases in the prices of products that we are observing now. The second part of your question is very hard to predict. Considering the current situation, I anticipate that it will take some time until Japan eases entry restrictions and for the number of foreign workers entering to recover to pre-COVID levels. Hopefully, the situation will change
around the end of this year, which is purely a guess. However, just looking back at trends in past pandemics, this is the third year of COIVD-19, so I expect the situation to hopefully change
around the end of this year.

What is the long-term role of immigration in addressing Japan’s shrinking population?  Are there alternatives to immigration?
The answer to this question is related to the one to question number one. The situation in Japan differs from the one in the United States, and so does the solution. While immigration may play a role, it will not be a major one. This is because improvements in productivity often get more attention than immigration in the case of Japan in order to handle its aging society. As you know, immigration is a very sensitive  subject In fact, the Japanese government declared that Japan doesn’t have an immigration policy. Instead, the word “foreign labor” or “foreign people” is seen in discussions on purpose because the Japanese government does not use “immigration” officially. Although the Japanese economy relies on foreign labor and the trend will continue, it is ironic to observe such a situation.

What does Japan need to do to attract immigration labor without experiencing the same kind of social and political problems that have occurred in other Western countries?

While there are several ways, I emphasize the importance of intercultural community building, because conflicts within the community can easily lead to anti-immigrant sentiments. People from different  cultures have their lifestyles so they differ in their tolerance for issues such as noise and sanitary conditions. Another important issue is education. It is becoming a major concern that some foreign children do not attend compulsory education from elementary school to junior high school. Compulsory education is a requirement for all Japanese citizens. However, Japanese law does not require foreign children to attend those schools. Enhancing social inclusion is very important and necessary in Japan. These issues need to be handled comprehensively because everything is not an independent issue.

Are there good academic studies on the cost and benefits of immigration in Japan? 

Whenever I have media interviews, they just want to know whether immigration is good or not. However, an academic approach is not so simple. Cost and benefits are examined by topics.
There are several studies, and I can discuss a few. One interesting study is on residential land prices. There was a concern in Japan that rapid increases in immigration may call land prices to fall because of negative images of some immigrants and their relationships with their neighbors. Using the case of Tokyo, the study shows this is not true, and we do not have to worry about this happening. In Tokyo, it was found that an increase in immigrants actually has a positive correlation with residential land prices. On the other hand, this creates other policy issues such as asset inequality between property owners
and tenants. Another study is on the impact of immigrants on unemployment rates based on industry categorizations. Although there was little impact of immigrants on unemployment rates in most
industries, an increase in immigrants is negatively correlated with unemployment rates in industries with labor shortages. The result suggests employment enhancement induced by immigration. Namely, immigration had a favorable effect in some industries.

There have been reports of expatriates in Hong Kong leaving the country due to the political climate and COVID policies with many of them moving to Singapore. Has Japan been capitalizing on this opportunity to attract high skilled workers, especially in finance, to Tokyo?

Actually, this is a very interesting idea. However, I have not heard of such efforts, especially with COVID-19. Financial companies have been taking advantage of artificial intelligence (AI), which has been  replacing traders. Hundreds of financial analysts have been replaced with AI at the Goldman Sachs office over the decade. Japan is moving in that direction rather than attracting high-skilled workers in finance. Living and working environments in Singapore and Hong Kong are also more attractive for foreigners than in Tokyo. Japan has tried to remedy this to attract high-skilled foreign workers, but I feel that the progress has been slow.

Kaito Komoriya CMC '22Student Journalist

Cory Schadt coryschadt, CC0, via Wikimedia Commons

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