Bank of Japan Governor Haruhiko Kuroda said that using foreign workers to help mitigate potential labor force shortages in the future deserves consideration.
The examination should be done in addition to ensuring increased participation of women and the elderly in the work force, Kuroda said yesterday, speaking at the Federal Reserve Bank of Kansas City’s annual conference at the Jackson Hole resort in Wyoming.
“Fortunately, during the current economic recovery, labor force participation rates, in particular those of women and the elderly, have been rising. It is critical to ensure that this phenomenon is not a cyclical one, but becomes permanent,” Kuroda said, according to the text of his speech posted on the central bank’s website today. “Utilization of foreign workers also deserves consideration.”
Prime Minister Shinzo Abe has embraced the potential for greater numbers of working women, and a limited increase of immigrants, tied to labor needs ahead of the 2020 Summer Olympics in Tokyo. The nation’s population slid for a third year in 2013, with the proportion of people over the age of 65 at a global record, underscoring the challenge the world’s most-indebted economy faces in financing its aging society.
Japan’s population declined by 0.17 percent to 127.3 million as of Oct. 1, as the country maintains one of the world’s lowest birth rates. People 65 years or older made up one fourth of the total, the highest-ever ratio, as postwar baby boomers head into retirement, the Internal Affairs Ministry said in April. That’s the highest of any country in the world, according to the Population Reference Bureau.
“Reflecting the aging of Japan’s population, the labor force participation rate has been on a downward trend, and serious labor shortages are likely to emerge in the future,” Kuroda said at the Fed’s policy symposium, also attended by Fed Chair Janet Yellen and European Central Bank President Mario Draghi.
Japan’s unemployment rate rose to 3.7 percent in June from 3.5 percent in May, driven by more people looking for work, with the labor force increasing by 120,000 people. The labor market also tightened further, with 1.1 jobs on offer for every seeker -- the highest since 1992.
Women on average accounted for 6.2 percent of management positions, according to a survey of 11,017 Japanese companies by Teikoku Databank Ltd., Japan’s largest credit research company. About 52 percent of companies surveyed don’t have any female managers, it said. In comparison, women fill 34 percent of management positions in the U.K. and 44 percent in the U.S., according to a Japanese government report.
Japan’s economy contracted the most in the three months through June since the record earthquake three years ago. The BOJ’s monetary easing is having its intended effects and the labor market has shown improvement, according to Kuroda. Further investment in labor-saving technology can also help to fight future labor shortages, he said.
“If, despite the delays, the strategy is implemented in a steady fashion, Japan’s economy will regain its vitality and achieve sustained growth,” Kuroda said.