Photographer: Noriyuki Aida/Bloomberg

Why Immigrant-Shy Japan Is Luring Foreign Workers: QuickTake Q&A

Japan’s aging population is leading to projections of a dire shortage of labor in the world’s third-largest economy. Prime Minister Shinzo Abe has made it clear that opening the country to permanent immigration by unskilled labor isn’t an option, reflecting an historic fear among the Japanese people that foreigners would cause social unrest and erode national identity. But opportunities are growing for overseas workers in a nation where more than a quarter of the population is 65 or older.

1. How bad is the labor shortage?

Japan’s population peaked in 2008 and the number of workers is expected to decline to 56 million in 2030 from 64 million in 2014, according to a government-backed think tank. A Manpower survey found 86 percent of Japanese employers reported having difficulty filling vacancies in 2016, more than any other country surveyed. Japan has one of the lowest unemployment rates among developed nations at 3.1 percent, and that’s forecast to drop.

2. How has Japan tackled the issue so far?

Abe has called for women and the elderly to pitch in. Workforce participation is rising among both groups, but not enough to cover the shortage. Women often struggle to find childcare or elderly care. Japan is also increasingly turning to a labor source seen as a threat in many industrialized nations: robots. Bank of Japan Governor Haruhiko Kuroda is among those who have called for more skilled foreign labor.

3. Why the reluctance to accept more foreign workers?

While public opinion polls show varying attitudes to immigration, analysts cite a concern that foreigners would drive up Japan’s very low crime rates. A so-called internship program, which employs about 210,000 people mostly from China, has repeatedly been criticized by the U.S. State Department as a form of forced labor.

4. How many foreigners work in Japan now?

The number topped 1 million in October, up 20 percent from the previous year. More than a third were Chinese, but the number of Vietnamese leaped by some 80 percent. About a third of the total were employed in manufacturing jobs, with increases seen in the hotel and restaurant industry. And it’s not just workers: Japan has one of the lowest levels of foreign-born citizens in the developed world.

5. How is Japan seeking to bring in more foreign workers?

The government is loosening regulations on foreign workers taking jobs caring for the elderly, in part by allowing them to enter the country under the internship system. The new drive is focused on special deregulated zones, which are to be allowed to accept foreign workers for jobs including guiding tourists, housecleaning and farm labor. (More maids will, it is hoped, free up more Japanese women to join the workforce.) Abe has also vowed to provide the world’s fastest path to permanent residency for skilled workers.

6. Is this a first?

There have been other drives to attract foreigners -- as well as efforts to drive them away. When unemployment rose after the global financial crisis of 2007-2008, Latin American workers of Japanese descent complained when they were offered cash and a one-way ticket out of Japan in exchange for the promise never to return. The current push is more focused on Southeast Asians, who are seen as more compatible with Japan’s way of life. And there’s more stringent vetting now. Just ask the Filipina housekeepers.

7. Will this loosening of the rules solve the labor shortage?

It’s inadequate, according to Robert Feldman, chief economist at Morgan Stanley MUFG Securities Ltd. But, he says, it’s a step forward.

The Reference Shelf

  • A Bloomberg story on Japan opening the back door to foreign workers.
  • A story on Japan’s criticized foreign-intern plan.
  • QuickTake explainers of Abenomics, Japan’s pension war and the effort to revitalize Japan Inc.
  • Japan’s workaholism is bad for productivity and population growth, writes Bloomberg View columnist Noah Smith.
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