The Labor Shortage in Japan

Mar 25, 2019


In the current article, I’d like to discuss some issues concerning the long-term economic future of Japan. I warn you in advance, this is going to be a pretty dark article, but let’s get into it.

Japan is one of the most rapidly aging societies in the world. This is the crux of the matter. There simply are not enough children. The reproductive replacement rate for a society to MAINTAIN its population is a little over 2.0 children for women, and for years, Japan has clocked in well below this level, meaning the number of Japanese who die every year largely outnumbers new births. As anecdotal evidence, it is often said there are more adult diapers sold in Japan than diapers for babies. With such a paucity of young people, the labor shortage being what it is should not be any surprise. Because there are so few young people vying for jobs, at least in Tokyo, there are many industries that are especially lacking in workers. In the last few years, at convenience stores in Tokyo, the number of foreign workers has exploded. Many young Japanese people avoid such jobs. Also, in the countryside (Inaka), there are severe shortages in construction labor. The reason? This is my impression, but it is due to a phrase shortened into KKK.

KKK is a Japanese acronym that stands for Kitanai (dirty), Kiken (dangerous), and Kimochiwarui (gross). Young Japanese people, being a rarity these days, enjoy a buyers’ market when it comes to part-time jobs-that is, there are not enough of them. So with the basic law of supply and demand, Japanese young people can demand, and discriminate to the extreme when it comes to part-time work. As such, part-time work that was traditionally filled by Japanese young people is increasingly taken over by foreigners from places such as Thailand, China, Korea, and other Asian countries.

What kind of work is lacking in labor?

As mentioned above, many menial jobs in retail and construction have almost no people to fill these roles. There also is a paucity of workers in the nursing field. Also as mentioned above, as the number of young people (i.e. those most adept at performing such work) has decreased, and with the increasing development of technology making such jobs irrelevant or obsolete, this trend will likely continue in the near future. This is not limited to Japan, but in the future, most menial jobs (such as cashiers at fast food restaurants, supermarket workers, etc. will become obsolete. In fact, they already are becoming replaceable in terms of how advanced our technology has become, but the costs of implementing these types of technology are a heavier burden than hiring young people (or foreigners) to do these jobs, so they currently exist, but in the future (and especially if basic living wages or an increase of minimum wages is approved, these jobs will disappear within weeks; you can bet on that. Another field that is extremely lacking in labor is nursing, as mentioned above, and in particular, nursing directed to helping elderly people. Taking care of elderly patients, many of whom suffer from dementia and Alzheimer’s disease, is very taxing work and the pay is not very good. In recent years, many foreigners from the Philippines and other Asian countries have been filling these jobs. One part-time job I have seen taken almost entirely by young Japanese people in recent years is Uber Eats. In Tokyo, you see these guys zipping around on bicycles with those distinctive Uber Eats backpacks (they’re a big, boxy backpack that is usually paired with a very distinctive green color lining the black). When I think about it, Uber Eats seems like an ideal part-time job for a young person (lots of time outside, exercise).

Cause and Problems with Labor Shortages in Japan

The main cause of the labor shortage in Japan is demographics: that is, the declining number of young people. The problems engendered by this demographic shift are mostly affected in the countryside in Japan. Young people leave the countryside for the big cities in droves, leading to some small towns and cities that are 50 and sometimes 60 or 70% elderly people. These local communities thus have no tax base (i.e. young working-age people), and as such, many local towns and cities have to merge (gappei) with surrounding towns and cities to somehow maintain some sort of tax base. Also, many local schools have begun closing because there are simply not enough children attending. When I used to teach English in the countryside, some of my friends taught English at local elementary schools, and some of those schools had a student body (all students) of 20-30 students (for an entire school!). Also, in many rural communities, train and bus services have disappeared because, once again, there are not enough people to justify maintaining such services. Many local communities, in recent years, have tried to entice young married couples to relocate by offering to build them a house, for free, on the condition they have children and agree to live in the community for twenty years or so. Also, with the advance of technology and the ability to work remotely, many local communities have tried to entice IT companies to relocate with tax incentives and the like. However, as far as I know, most of these efforts have not been successful.

How Technology can Solve this Labor Shortage

I don’t know if it can. I honestly think technological advancements will exacerbate this problem. That is, in the near future, most menial jobs, such as register-type jobs can and will be replaced, but the current state of AI (despite what the experts may tell you), is not good enough to replace highly-skilled workers, and moreover, highly-skilled workers have connections and can probably lobby politicians to block the implementation of such technology-saving measures. This means, the people who are trying to engage in menial jobs will be unemployable, and those engaged in high-level jobs will retain their jobs, which brings up the inevitably of a universal income and other such political issues. Much has been bandied about in recent years how computers and AI can solve many of these labor shortages, but as someone who works with patents, I can tell you right now that AI applications and the like will have little influence on the labor shortages in areas such as health care. What I see happening is a large number of non-tax paying people being displaced with this technology, further exacerbating social inequality and the like. About this, I am not sanguine. Japanese people have, in general, a very positive view of robots and technology, but the current level of AI, as far as I can tell, is absolutely ill-equipped to deal with elderly patients in retirement homes and the like.

Can immigration solve these problems?

In short, no, I don’t think so. While I think technological innovations are not yet equipped to carry out complicated tasks like dealing with old people in retirement homes, it is already possible to replace many menial tasks with the current technology. Importing thousands of people with no language skills to perform jobs that can be replaced tomorrow is not sound policy. In the past few years, the number of foreigners working in grocery stores and convenience stores has increased a lot. I’m not sure what Japanese people think about this, to be honest. I suspect that, as Japan has been a homogenous country for as long as it has existed, they are somewhat put off or suspicious of this development, but as with so many things, I also suspect many Japanese people have taken a “shou ga nai” (can’t be helped or “waddya ya gonna do?) attitude. I actually like that about Japanese people. When stuff goes sideways or even terribly wrong, Japanese people tend to take this “shou ga nai” approach. Nothing can be done, so there is no sense in getting upset, so let’s keep a stiff upper lip and slog through this. Anyway, I think importing people to handle a labor shortage in menial jobs is a permanent solution to a temporary problem (permanent in that, as the number of those getting permanent residency and Japanese citizenship increases, they will remain permanently).

What is the opinion of Japanese people concerning all of this?

As I mentioned at the beginning of this article, this is going to be a somewhat dark article, and here, we are really going to get into the darkness, so to speak. Japanese people under the age of 50 (essentially, anyone born in the mid-1970s or thereafter) never experienced the bubble economy of the mid to late 1980s. At the risk of making a sweeping generalization: Japanese people who were working adults during the bubble economy tend to be a lot more optimistic than those who have only experienced the economic slump that has continued until today. I am old enough to know many older Japanese people who were working adults during the bubble economy of the 1980s, and when you hear these people talk about this period, you can understand their optimism. I was only a child during this period, and I was in America, but I DO remember a brief period when everyone was scared Japan was going to take over the world. For you young people out there, watch the movie Black Rain starring Michael Douglas for a sense of how Japan was viewed at the time. During the bubble economy, bonuses were plentiful, working as a seishain (full member of a company) was the norm, and salaries in combination with said bonuses were such that even OL (office ladies, or secretary-like workers) were buying second homes in Hawaii. The sky was the limit, and many of these Japanese people were the equivalent of American baby boomers (those born after World War II) in terms of their age. These people remember the abject poverty and despair of post-war Japan, and then as working adults, they were actively involved in and living during this period of absolute affluence. It is no wonder these people were so optimistic, and it is also no wonder why these people married and had children: The sky was the limit, and the future looked bright. Flash forward a few years, Japanese people who never experienced this Phoenix-like rise from post-war Japan to the bubble economy tend to be a lot more pessimistic. In the past, while becoming a seishain was the norm, now, working part-time (in the form of baito, keiyakushain, or shokutaku) is now much more common. In the past, with economic prospects being what they were, getting married, buying a home, and having children were seen as the ultimate goals in one’s life; now, such things seems impossible for many young people. What I am trying to get at, through all of this, is the following: Japan’s labor shortage is a manifestation of demographic trends, and these demographic trends are largely influenced by economic factors. This is only my impression, and I don’t want to speak on behalf of millions of people, but I think that many Japanese people have adopted a very nihilistic, pessimistic attitude toward the future of this country and to their own futures. This “shou ga nai” attitude I mentioned earlier, while laudable when dealing with the vicissitudes of daily life, is probably not the best approach for dealing with matters of a more grave nature.

Labor Shortage in Japan: Industries with a Lack of Workers in Japan

Thank you for reading to the end of this admittedly dark article. I would like to close on a somewhat more upbeat note. To address the current labor shortages in Japan, the government here has made coming to Japan to work easier than it used to be. Now is a really good time to travel to and work in Japan.

 

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