Commentary / Japan

Drastic employment changes are coming

by Takamitsu Sawa

At the eleventh hour of the recent extraordinary session of the Diet, a highly controversial amendment to the immigration control law — aimed at expanding the number of foreign workers employed in Japan — was enacted. In the course of the Diet deliberations, Prime Minister Shinzo Abe repeatedly said the amendment aims to accept qualified foreign workers to work in this country for a limited period of time in order to cope with the acute domestic manpower shortage.

The opposition parties bitterly criticized his assertion by pointing out that the amendment did not set an upper limit for accepting the workers from overseas and that large numbers of foreign students at Japanese-language schools are being hired at extremely low wages.

Even some Liberal Democratic Party members and conservative polemists complained that the government was effectively introducing an open-door immigration policy.

Although Abe has repeatedly insisted that the amendment does not represent a policy of throwing open Japan’s doors to immigrants, it is difficult to deny that the amended law will boost the number of non-Japanese settling in Japan because it opens the way for foreign blue-collar workers to be employed in 14 employment segments such as agriculture and construction, where the hiring of such people has been rigidly restricted.

The amendment was bulldozed through the plenary session of the Lower House on Nov. 26 and the Upper House in the small hours of Dec. 8 on the strength of the commanding majority held by Abe’s ruling coalition in both chambers.

In the Lower House Judicial Affairs Committee, the question-and-answer session was ended after only 15 hours and 45 minutes, a record short amount of time spent on discussing such important legislation. Once again, the force of numbers came into full play in Diet proceedings.

Let me turn to a different, but related, subject. It has been said that by around 2030, artificial intelligence and robots will replace the human workforce at manufacturing plants while computers will take jobs away from a majority not only of simple clerical workers but also of such professionals as medical doctors, lawyers and accountants.

According to a joint study by the Nomura Research Institute and the University of Oxford, a considerable number of the 601 professions surveyed will disappear and one out of every two Japanese workers will fall out of employment. Although the space for this column does not allow me to go into detail, I have concluded after in-depth analysis of the process leading to such conclusions that the outcome of the joint study is an utter exaggeration based on haphazard grounds and is not worthy of trust.

Nevertheless, AI and robots will undeniably bring about drastic changes in the Japanese labor market worthy of the name Fourth Industrial Revolution. In my opinion, the scale of what John Maynard Keynes called “technological unemployment” — loss of jobs caused by technological changes — will be around 10 percent of the labor force, rather than 49 percent as predicted by the Nomura-Oxford joint study.

In short, although increased efficiency brought about by AI will surely result in reducing the number of those employed in many types of jobs, the number of occupation categories that will be eliminated will not be that large. For example, the joint study predicts that the profession of certified public accountant will cease to exist. Certainly AI will greatly improve the efficiency of accounting and auditing jobs, leading to a reduction in the number of CPAs needed to perform these jobs. The same can be said of medical doctors and attorneys. But since AI does not possess the tacit knowledge that professionals have acquired through many years of experience, it is inconceivable for the professions of CPA, doctor and lawyer to disappear.

The crucial question is whether technological renovation can simultaneously create enough new employment opportunities to make up for jobs lost due to technological unemployment. When computers helped the Third Industrial Revolution make big strides between the 1990s and around 2010, the number of workers declined sharply in areas like accounting firms, bookstores, brokerage firms, printing and bookbinding businesses, bank counters and railroad stations. But the computers created only a tiny number of new jobs.

Many of those who lost their jobs to computers had to go to Public Employment Security Offices to look for new sources of income. But unless they possess special skills, they had to settle for less desirable jobs like caregiving, working at convenient stores and supermarkets, and janitorial work.

If Nomura and Oxford are right in predicting that one out of every two workers will lose their jobs by 2030 as a result of the Fourth Industrial Revolution, it is highly inconceivable that enough new employment opportunities will be created to hire some 33 million newly unemployed people. Even if the job loss ratio is limited to 10 percent, as I think it will be, a majority of some 6.6 million job losers will have no choice but to work in “3D” jobs that are “demanding, dirty or dangerous,” which most people would like to avoid.

While the progress of the Fourth Industrial Revolution may make workers at manufacturing facilities and clerical workers at company offices unnecessary, job offers will increase steadily in segments like construction, care giving, the hospitality industry, cooking and cleaning. In line with this, the amended immigration control law opens the door for non-Japanese to be employed in the 14 sectors now hit by the severe labor crunch, which include the five sectors mentioned above.

In 10 years, a majority of workers at manufacturing plants and clerical staff in both the private and public sectors will have no choice but to look for new jobs in areas that neither AI nor robots can replace the workers and most people would rather avoid. This will create a bitter competition for jobs between Japanese nationals and the foreign workers who have settled here. As a result, wages in these areas will fall rapidly, bringing about economic and social disparities of an extraordinary scale.

A short-term, optimum solution given by the amended law to the 14 industrial segments facing the serious manpower shortage will without any doubt exacerbate such disparities and lead all of us into an unstable society with high long-term unemployment.

Takamitsu Sawa is a distinguished professor at Shiga University.

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