Commentary | COUNTERPOINT

Immigration reform: Could this be Abe's new growth strategy?

by Jeff Kingston

Special To The Japan Times

The politics of immigration in Japan involve anxieties about national identity and worries about crime. Looking at other countries with large numbers of immigrants, the Japanese government has said “no thanks.” There are, however, strong economic reasons for Japan to let down the drawbridges.

Advocates point to Japan’s shrinking population, impending labor shortages, and the need for more taxpayers to keep the national medical and pension schemes solvent without considerably upping individuals’ contributions.

Critics fear that too many foreigners living in their midst will rip asunder the fabric of society and endanger what they cherish about Japan. But not all opponents are xenophobes; some argue that until Japan can ensure foreigners’ rights and provide equal opportunity it should not being putting out the welcome mat.

As of 2012, 24 percent of Japan’s population, numbering about 30 million, is over 65 years of age, and this will reach 40 percent by 2055. More importantly, the number of workers supporting each retiree is shrinking, from 10 in 1950 to 3.6 in 2000 and 1.9 by 2025. And there are fewer replacements in sight.

Who is going to pay sufficient taxes to fund retirees’ pensions and medical care? And who will take care of all these elderly people as they grow frail? Until now, female relatives have done most of the heavy lifting, but a third of these caregivers report giving up their job in order to do so, representing a significant loss of household income and derailed careers. On top of that, many spouses are getting too old for the job.

About one-half of family caregivers are age 60 or over, meaning that much of elderly care is in the hands of the elderly. Currently, care managers decide on how much national insurance-funded professional assistance the elderly get at home, but it is supplementary. Given that primary caregivers are usually female relatives, the declining number of middle-aged women combined with the rapid growth in the number of over-65s in the population suggests the limits of this model.

The major implication is a serious shortage of nurses and caregivers, with estimates in the hundreds of thousands. The annual turnover rate for caregivers is more than 20 percent, and some 500,000 Japanese with licenses have given up working in the field; clearly many workers feel it is not a desirable calling.

So who will take on these difficult, low-paid jobs? The answer might come from overseas, but there is a tight global market as aging societies elsewhere are also competing for the same limited pool of caregiving professionals — and many offer a better deal than this country.

Japan has initiated tiny pilot programs with Indonesia and the Philippines, but the acceptance and retention criteria are set so high that the programs are designed to fail. The difficulties of mastering written Japanese, stringent qualification exams, and the prospect of being sent home for failure to pass exams will hamper Japan’s efforts to recruit and retain sufficient numbers of foreign caregivers. Hence such programs offer little immediate relief to the existing acute shortages.

As of 2011, 63 out of the original 104 nurses who came from Indonesia in 2008 had returned home, citing language and other problems. Reportedly, they were discouraged by restrictions preventing them from administering some treatments, such as drips and injections, that they had been licensed to administer in Indonesia. Instead, they are assigned tasks that do not require professional training, such as bathing patients and table setting.

In 2012, only 47 of 415 non-Japanese candidates passed the nursing exam. Nursing homes estimate that its costs ¥30 million to train and employ a nurse over the four-year initial visa, meaning that vast investments in human resources are being squandered. Things have got so bad that this year the government decided to give nurses and caregivers from both countries an extra year to prepare for their exams. But this is an inadequate, band-aid for a program that needs more fundamental surgery; a microcosm of the overall policy challenges presented by immigration.

The doubling of the number of foreign residents in Japan over the past two decades, to 2.2 million, has raised anxieties among Japanese about the future of their country, national identity and how to manage the influx — even though this represents less than 2 percent of the population.

While Japan as a monoethnic, homogeneous nation persists in the collective imagination, that perception is being confronted with some jarring signs of transformation evident in increasing numbers of international marriages and permanent-residency visas over the past two decades. Ironically, recent studies suggest that in rural areas foreign wives have played a key role in preserving traditions, taking over roles that fewer Japanese women choose to assume.

Alas, public discourse is dominated by widespread misconceptions that foreigners are crime-prone — despite national crime statistics proving they are not a menace to society.

Back in the early 1980s, Japan accepted more than 10,000 Indochinese refugees, and they have done well and contributed to the communities where they live. It’s an unheralded success that bears repeating. The United Nations estimates that to stabilize Japan’s population and avoid the consequences of a declining and aging population, immigration needs to rise to 650,000 a year. That, though, just won’t happen.

But even if on a smaller scale, expanding immigration could boost Japan’s capacity to innovate and create new wealth, bringing an infusion of new ideas, language and cultural skills, global networks and entrepreneurial spirit.

The recent influx of Chinese since the 1990s demonstrates just how valuable immigrants can be, as these people have leveraged their transnational networks to facilitate and contribute to burgeoning trade and investment links. Many come as students and remain because they can get good jobs and start profitable businesses. Since 2007, Chinese have become Japan’s largest foreign resident population (more than 600,000), while an additional 100,000 have become Japanese citizens.

In certain sectors facing a shortage of skilled workers, such as IT, the government has initiated a new points system that targets foreigners with desired skills, achievements and level of income. But this fast-track permanent-resident visa program is small, involving only about 2,000 people a year who are already working in Japan.

By way of comparison, the United States — with a population more than double Japan’s — lets in 225,000 foreigners with special skills every year because there is recognition that talented foreigners are contributing to innovation, and immigrant entrepreneurs are creating job-generating businesses.

Indeed, The Economist recently reported that immigrants or their children founded 40 percent of Fortune 500 firms and were responsible for 25 percent of all high-tech startups in the U.S.

A senior Cabinet office vice-minister in Prime Minister Shinzo Abe’s government recently mentioned increasing the numbers of foreign engineers and other skilled workers by annual increments of 100,000 by easing criteria. In terms of growth strategies, the potential benefits of attracting resourceful immigrants are significant, since — just as in the U.S. — they could be engines of innovation and employment. Migrants tend to have high aspirations and are willing to work hard to achieve them; to the extent they prosper they could help rejuvenate the overall economy.

Tadashi Yanai, CEO of Fast Retailing (Uniqlo), supports immigration as a way to tap into the rising Asian story and make Japan more dynamic. But nurturing and mobilizing immigration’s potential in Japan means creating a more hospitable and appealing environment — and that’s an agenda still in search of a constituency.

Jeff Kingston is Director of Asian Studies, Temple University Japan.