Can you briefly describe the demographic crisis that Japan is currently facing? What are the implications of these demographic trends for the country’s economy, its labor market, and its social programs?
Japan is the most rapidly aging society in the world, and currently about a quarter of its population is over 65 years of age. That is expected to be close to 40% within the next decade or so. It also has a very low fertility rate, and so you have a demographic crunch on both ends. What this means from a fiscal perspective is that there is great pressure to provide social spending and social security to an older population with an ever-decreasing population to support those fiscal obligations.
Regarding the labor market, on the one hand you could say it provides more opportunities for young people because there are obviously plenty of jobs. But it also means that there is less dynamism, and there is a great need for people to fill in jobs that are not necessarily the most desirable.
This month Japan has for the first time begun issuing temporary visas to low-skilled workers, with an initial quota of 345,000 migrants. What makes this policy worth noting? What kind of workers does it intend to attract to Japan? Where will these workers come from?
There are two types of visas that have been offered since the 1st of April. One is what you said, for low-skilled workers, so these are the people who will be coming in to fill the jobs that are less attractive to aspirational Japanese youth – especially those in lower-end healthcare, and caregiving more generally, as well as jobs in the construction sector.
The other side of the visa issue is that they are issuing more visas for higher-skilled workers who are really the best and brightest in the world, especially in the tech-related sectors. For the lower-skilled people there are many restrictions. They are not allowed to bring in family members, and the visa is temporary, lasting only for about 5 years or so, and then after that they have to go back to their country of origin. If you come in as a higher-skilled worker, though, it could lead to a possible permanent residency, and you are also allowed to bring in family members.
So there are two tracks, the first track – the lower-skilled workers – are probably more from Southeast Asia, especially from countries like the Philippines which has a tradition of training really great nurses who are adept in the caregiving sectors. The higher-skilled workers are ones who would want to have the best jobs in a global market, so they are people in the finance industry and creative industries, but those types of people could probably get jobs in other countries as much as in Japan. So while Japan could be an attractive market for them, they have other options as well. It’s going to be a challenge for Japan to be able to attract the best and brightest in the world.
Given the immense need Japan has for presumably all types of workers, what’s the rationale for distinguishing between the two groups to this degree, or making it significantly harder for low-skilled workers to relocate to Japan on a longer-term basis?
Japan has historically seen itself as a very homogeneous society. Whether it is true or not, the basic perception among the Japanese themselves is that its people are of one race, they share a common history, a common culture, and a common language. Therefore, it would be difficult for non-Japanese to assimilate and be part of that social fabric of Japan. The common belief is that foreigners would disrupt Japanese society as it exists today. However, given the demographic realities it is imperative that Japan has and alternative workforce to pull people from outside of its own borders.
Having said that though, if you look at the global trend right now there is a wave of anti-immigration politics, for instance in the United States. But Japan is very much the polar opposite of the United States in that respect, as it begins to seriously consider possibilities for accepting immigrants. Tokyo’s policy challenge will be to balance its economic needs with its concerns about social cohesion as it accepts immigrants.
Until quite recently Japan has very much resisted immigration, and they had looked to become self-sufficient by exploring technology, especially robotics, to meet some of the labor shortage challenges. But there's a limitation on that in spite of all the progress with AI, and in spite of the technology revolution.
The understanding is that the problem of aging is so severe that Japan needs to look outside its own borders to meet some of those needs. This is not new though – Japan has had immigration patterns in the past. About 20 years ago during the height of Japan's so-called bubble economy, they actually looked to Brazil, which has the biggest pool of Japanese immigrants, to meet some of the shortfall in the labor pool because Japan was doing so well at that time. They would bring in ethnic Japanese-Brazilians on the expectation that because they're ethnically Japanese, they have that cultural heritage, so it would be a lot easier for them to assimilate back into Japan. But that was not necessarily the case.
I think Japan has learned a lot from that experience, there is a consciousness that it is not simply about opening doors to migration, it is necessary to follow up on it. There is a great deal of debate about how public facilities, including public schools, can accommodate new people. Again, the number of 350,000 people is not very large, but my expectation is that this number will continue to rise, especially if this initial pool of people does well and if they are seen as incredibly useful, productive members of Japanese society that Japan cannot do without. But I should also point out that the Japanese government does not call this new legislation an immigration policy, they call it “foreign workers legislation,” making that distinction between immigration and opening doors to foreign workers.
How would you say that Japanese cultural attitudes with respect to immigration are changing, and to what extent might they still complicate the integration of foreign workers or the success of the foreign workers policy?
There's the official policy on migration or foreign workers, and the unofficial one. Officially there is new legislation from April that opens up the door to a limited number of migrants coming in, but if you have ever been to Tokyo and you go to a convenience store or to a food place, a lot of people who are working there are not Japanese, and they are working because they are students there on a student visas, but essentially they are the front line of the workforce. There are also policies that allow so-called internships, but they have essentially been a way for people to get around some of these issues to work in Japan.
So migrants are already there, foreign workers are already there, especially in big cities like Tokyo. These people who are not Japanese are providing valuable service, being very visible working in convenience stores and restaurants and whatnot. It is accepted, and it is part of daily life. This is really making it more official, and also expanding the number, opening up Japan to potentially more workers.
Critics say that the new policy does too little to help foreign workers thrive in Japan, and that it has few mechanisms to facilitate their integration into Japanese society. What more should be done to achieve these goals?
Japan is less of a federal system than the United States, so the power of each prefecture or state is not as strong as the states here in the United States. There isn't a lot of variation from prefecture to prefecture, whereas here the policy that Texas adopts is going to be very different from the one that Massachusetts adopts. That said, a lot of the specifics about whether you have Japanese as a foreign language class, or how much money should be devoted to encourage assimilation of migrants really depends state-by-state, district-by-district, and school-by-school. Some are more open than others, and the big urban areas already have a very high population of migrants.
In districts like Shinjuku, which is part of Tokyo, there are a great deal of young people who are not Japanese because they are there on temporary student visas or through other ways. These areas are probably a lot more involved in trying to figure out what is needed, precisely because they already have that big population of foreigners, so they already know from working with them what works, what doesn't, what should be done better, and what kind of money should be spent in addition to what is already being spent. It's a process of trial-and-error. In many rural areas in Japan, they are not as used to a foreign population, so that variable has a much steeper learning curve.
Can you incentivize people to do this? Yes, you can do it by adopting different policies that encourage businesses to invest more in foreign workers; you can also probably have a quota system. There are many ways to encourage foreigners to be part of Japanese society, to incentivize people to welcome them with open arms. But it's also a cultural thing. I think there is more that can be done to encourage understanding of where people come from, so it's not just about pushing Japan on them, but for the Japanese to understand more about the Philippines or more about wherever these people may come from. I think there are efforts to do so already, they just need to be scaled up really quickly.
What kinds of cultural changes might the acceptance of more foreign workers induce, especially in the workplace? How do these changes stand to benefit Japan, and what problems could they potentially pose?
This is where my personal interest lies. When we look at the economy of any country in the industrialized world, and we look at potential growth, it's often times more in the service sector then in manufacturing sector – the creative economy, the innovation economy. What creates innovation, what creates that kind of dynamism that makes companies or individuals or groups make apps that go viral, that have this amazing global appeal?
It is not going to be from one person or one company. You need that kind of incubator situation where ideas flow and there is networking and there is diversity. Diversity is a very operative word here. One of the challenges that Japan will have in the future, apart from the whole aging thing, is that it does tend to be more insular than other countries. It is still very difficult for women to have full-time professional jobs after having a family. It is not impossible, but it is just difficult for all sorts of reasons. But that is a separate topic.
The professional workforce in middle management upwards tends to be male and it tends to be a certain type of person. By having more migration, that leads to greater diversity, that leads to more awareness of differences and a diverse set of values. I think that would actually lead to greater competitiveness within Japan. If you have workers from the Philippines who are very family-oriented, or very religious, these types of things will lead their coworkers to hopefully respect different traditions and different cultures as well. This is my hope, and the net result could be more different perspectives on various things. Now, a downside of this is that it can also lead to greater exclusion, and it could lead to greater animosity. It could lead to a deliberate close-mindedness. It could go either way, and this is why a more top-down public policy that encourages these newcomers to flourish is needed so that they do have respect and can integrate.
Immigration in other countries has invariably been seized by rightwing populists as a wedge issue. Do you think immigration will also become a divisive issue in Japan in the future?
The Prime Minister, Shinzo Abe, made clear that this is not an immigration policy, but a foreign worker adaptation policy. Why did he make that distinction many, many, times? Because voters have a great fear of immigration, especially looking at the global trend. There are already people who are concerned about this wave of migration.
But again the number is very small, so most areas across Japan will not be impacted. They are going to be in concentrated areas, and the concentrated areas already have a lot of foreigners there anyway, so the absorption is going to be hopefully pretty easy. If they continue to increase the visa number, then that becomes a different question. But all in all I think that what will happen is that there will be a very practical approach to resolving a very immediate concern.
With the immigration legislation that is in place, and if 345,000 people are absorbed, and then if the numbers continue to increase, the question becomes whether they will actually change the legislation itself. Right now those lower-skilled workers are not allowed to bring families, and they're only allowed to stay in Japan for 5 years. Will they be allowed to bring family members, will they clamor to have their family members brought in, or will they just kind of bring them in anyway as tourists and overstay their tourist visas? Will that create social unrest?
These are all elements that we have yet to see playing out, but certainly these are issues that the government is very aware of. Yes, it could lead to greater divides amongst the political parties, but none of the political parties in Japan at the moment is proactively pro-immigration. They may not be incredibly anti-immigration, and some are more anti-immigration than others, but there is not one that is incredibly supportive of immigration, and I do not expect that to change anytime soon. It will be seen as a necessary solution to an immediate problem, but nothing more.
Image Courtesy of Naver University.