Is Japan a land of contradictions or opportunities for immigration?

Extract from the Japan Times that published on July 17th, 2018. Written by Yumiko Murakami – July 17th, 2018
(https://www.japantimes.co.jp/opinion/2018/07/17/commentary/japan-commentary/japan-land-contradictions-opportunities-immigration/)

It is often said Japan is a land of contradictions, a society where the reality on the ground is substantially different from the facade presented to the outside world. Perhaps one of the most telling situations of such discrepancies is immigration.

According to the official statement of the Japanese government, there is no such a thing as immigration in this country. General perception is that migrant workers are only needed if they have high level professional skills or unique technical expertise.

What about the cashier with an exotic name tag on his uniform at your regular convenience store? And your grandmother’s favorite caregiver at her nursing home who speaks fluent Japanese, albeit with a slight accent? Most of these foreigner workers who are an undeniable part of Japan’s labor supply today are categorized as students or trainees. They are not work visa holders and, therefore, not counted as such in the government statistics.

The most recent data shows the Japanese economy employs 1.27 million foreigners, almost doubling since 2012. Given that only 2.5 million Japanese have joined the labor force over the last five years, it means one out of every four new workers during this period has been a foreign-born. Most of them come from neighboring Asian countries and work under the restrictive conditions required for technical trainees or students. These foreign workers have become a critical element of the lifeline of the Japanese economy, even though many of them are not officially recognized as full-fledged workers by the government.

The latest OECD report on immigration shows that temporary labor migration to OECD countries accounted for around 4.2 million workers in 2016, 11 percent more than 2015. Excluding Germany and France, whose temporary migration inflow was mostly intra-EU/EFTA posted workers, Japan was the fourth-largest host country to receive temporary labor migrants, after Poland, the United States and Australia. It is a noteworthy trend for a country that has yet to fully embrace the notion of immigration.

One could argue that there is no country other than Japan in the world today that has all the right conditions to welcome economic migrants. With the rapidly shrinking working-age population due to the declining demography, the unemployment rate is at a minimal 2.2 percent in Japan. Women who used to be under-represented in the job market now have achieved a higher labor market participation rate compared to the average OECD countries, thanks to supportive measurements taken by the government and the business sector.

Automation and robotics have been at the forefront of companies’ business strategies, but technology replaces mostly routine tasks and many low-skilled jobs are actually not suited for automation. Despite all the efforts to address the labor shortage crisis, companies are still in dire need of workers, particularly in labor-intensive sectors such as construction, agriculture, retail and nursing care. Unlike many European countries where unemployment is persistently high, temporary labor migrants pose no direct threat to native Japanese workers. On the contrary, foreign workers may be the only solution left for the Japanese economy to get back on the growth path.

Last month, the Cabinet approved a new economic policy package that includes the establishment of a new resident status for foreign workers in certain designated industries. The government hopes that this policy will bring an additional half a million foreign workers by 2025 to the business segments severely hampered by the aging demography. It is substantial progress on the part of policy makers to legitimize unskilled foreign labor in the Japanese job market. While discussing the new work visa scheme, politicians have categorically denied the possibility of these foreign workers turning into long-term migrants. “They are invited to work on a temporary basis in Japan to alleviate the pressure arising from acute labor shortages,” Prime Minister Shinzo Abe insisted in a Diet session.

Now that Japan is ready to officially recognize the need for foreign labor, perhaps Japanese lawmakers should be reminded that these foreign workers are economic migrants and not people in need of protection. For Japan to continue to recruit workers from countries such as China, Vietnam, Indonesia and the Philippines, the Japanese proposition needs to be more competitive and attractive relative to opportunities available for workers in their home job markets and overseas.

Moreover, the aging population is quickly catching up in a few other countries in Asia, including South Korea, China and Thailand. These countries will be soon competing against Japan for the same young workers to compensate for their graying labor force. In fact, South Korea has already implemented comprehensive immigration policy packages to entice temporary labor migrants, some of whom may stay up to almost 10 years or find pathways to permanent residency.

Although temporary migration is not — initially at least, and for many programs — a stepping-stone to long-term residence, it is often closely tied to permanent migration. A sizable share of temporary migrants in OECD countries change status and stay on as long-term residents. Access to permanent residence is an important aspect of immigration policies that most international workers find attractive. It can also benefit employers by enabling them to retain trained workers. Another area of focus is language training. Migrants receiving high-quality training in local languages have proven themselves more productive in their jobs and they have more smoothly assimilated in host communities.

Japan is not the only country reviewing its immigration policies. In fact, there is an ongoing process of development and renewal of migration strategies in most countries, often accompanied by administrative shifts. They are sometimes responses to particular conditions, like new migration streams, recognition that past courses of action need to be reassessed or changes of government.

Japan could certainly benefit from best-practice sharing with other countries that have a wealth of experience with the challenges and opportunities of international migration. The good news for a novice host country like Japan is the mid- and long-term impact of immigration on labor market and broader economy has been generally positive in most OECD countries. Instead of being a land of contradictions, Japan should present itself as a land of opportunities for foreign workers.

Yumiko Murakami is head of the OECD Tokyo Centre, where she engages in policy discussions between the OECD and governments, businesses and academia in Japan and Asia, covering a wide range of economic policy issues.

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