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Clear strategy needed for inviting foreign labor

by Ichiro Asahina

As I wrote in my June 20 column, Japan is facing a very severe situation of an aging society and population decline. I use the term “severe” because it will be quite difficult to change this situation by any realistic policies. Japan’s total fertility rate is at a mere 1.43. It is said that once this figure goes below 1.5, it won’t return to the level that can maintain the population (around 2.08).

It would then be natural for some people to think that accepting immigrants holds the key to coping with the situation. In fact, the total number of non-Japanese in this country is drastically on the rise. At the beginning of this year, about 2.5 million were living in Japan, accounting for more than 2 percent of the total population — a record high. In Tokyo, one in 20 people in their 20s is non-Japanese.

Japan has long been considered one of the world’s most closed countries. While the number and the proportion of non-Japanese in the population are at historic highs, they remain negligible in comparison with other developed countries. In the United States, the proportion of foreign nationals in the total population is 7.0 percent (as of 2014), 6.0 percent in France (2015), 11.2 percent in Germany (2015) and 29.5 percent in Singapore (2015).

Moreover, Japan accepts very few refugees from overseas. When my French friend told me that Japan accepted only 20 refugees last year, I initially doubted the figure but it turned out to be correct. In recent years, the number of people seeking asylum in this country has spiked. Last year, the figure hit roughly 20,000 — almost double from the previous year. Some people say that many asylum-seekers aren’t really refugees but only disguised as such.

While other developed countries, particularly those in Europe, positively welcomed immigrants in the past, Japan rigidly refused to open its doors, earning itself a reputation of being closed. But the situation completely changed after the string of terrorist attacks in the U.S. and Europe in recent years — including many cases in which the terrorist acts were perpetrated by second- and third-generation descendants of immigrants, who are often called “homegrown terrorists.”

Humanitarianism and benevolence are certainly important. But, in reality, it is usually difficult to include every foreigner warmly in certain societies. While first-generation immigrants themselves tend to have deep gratitude for the society that welcomed them, the mentalities of their children and grandchildren are often quite different. They didn’t choose the country where they were born and grew up. They are often discriminated against and persecuted because their appearance and lifestyle are different from the majority of the local population, even though their nationalities are the same. It is no wonder that some of them come to hate their mother country.

Japanese people consciously or unconsciously knew of this “inconvenient truth” and the government restricted its acceptance of immigrants. But there is another inconvenient truth — that if a society never takes in any external talent, there will be no progress. In fact, the Japanese economy and society seems to have lost the vitality that they once had during the 1970s and ’80s.

Japan’s basic stance on this matter has been, therefore, to accept only skilled foreign workers more aggressively. In 2012, the government created a “new point system for foreign advanced workers” under which, if a foreigner gets more than 70 points (points are given according to his/her income and track record such as academic and employment history), they can relatively easily get permission to live and work in Japan. In 2017, the government modified this system and established the so-called Japanese green card, or work permit for foreigners.

But, in fact, Japan’s population began to decline around 2010 along with its rapid aging. In short, Japan critically needs more unskilled labor. It is said that in 2035, the nation will be short of about 800,000 nursing care workers. While Japan has sought to invite only skilled workers from overseas, many of them tend to choose to go to other countries, such as the U.S. and China, where the economies are growing rapidly. And today, Japanese society demographically needs more young unskilled labor.

Although Japan has officially prohibited unskilled labor from abroad, the nation has in fact been unofficially welcoming them. The most widely known example is the Technical Intern Training Program. Officially, people who come to Japan under this program are supposed to learn advanced skills by doing internships at businesses and farms here. But everybody knows that they, in fact, provide the critical manpower that fills the domestic labor shortage. In short, they are treated as workers, not trainees. Last year, the government added nursing care — one of the sectors facing a severe manpower shortage — to the areas in which the trainees can work under the program.

And recently the government announced a plan to establish a new official channel to accepting unskilled labor from overseas by creating a new residency status for foreign workers. Foreign workers under the program are said to be under consideration for at least five sectors: agriculture, construction, shipbuilding, lodging and nursing care.

If we look back on the history of Japan’s policies in accepting foreign workers, we might say that there has been no strategy. True, the official position has always been clear: accepting only skilled workers and excluding others — but that cannot be deemed a strategy. It’s just what people wish for in every society, and there’s no element of competitiveness. In addition, Japan has in fact been driven to accept large numbers of unskilled workers from overseas because of the serious domestic manpower shortage. Such a position seems hardly sustainable.

I believe that Japan’s past position on the issue was not necessarily bad — particularly as we look at the current situation in Europe. It was a very realistic approach to maintaining harmony in society. Embracing large numbers of foreigners at once is not as easy as one might think. Japan’s recent gradual approach to welcoming unskilled labor from abroad in such sectors as nursing care and construction is also reasonable and understandable, even though some might say the government’s moves often come too late and too slow.

Still, Japan’s policy has lacked any strategy and any message to the world. What kind of worker does Japan want to invite from overseas? What should Japan do to deliver a clear message to potential candidates from abroad?

As a first step, Japan should declare priority areas needing foreign talent, based on its own competitive advantage. In my opinion, those are art/culture and technology/science. For example, Japan could invite famous or up-and-coming artists and give them preferential treatment.

Not only conservatively protecting its society but creating a new community by inviting so-called creative-class foreigners with a clear message is definitely important for the future of Japan.

Ichiro Asahina is the chief executive officer of the Tokyo-based think tank Aoyama Shachu Corp.