COVER STORY • Exploring for the Best Models of an Aging Society – Lessons from Japanese Experience • 10 apan: Immigration, a Remedy for the Aging JPopulation? By Valerie Moschetti Author Valerie Moschetti
There are 126 million inhabitants of Japan. Life expectancy is ranked 20th among OECD members for labor productivity, mainly among the highest in the world: 87 years for women and 81 years due to the non-manufacturing sector. It appears that Japanese for men. By 2040, more than 35% of Japanese people will be 65 and service-sector companies have not invested enough in productive over (28% today). Meanwhile, the fertility rate continues to drop to capital and technology during the past 20 years. They employed too currently 1.4 children per woman (with a population replacement many people and ignored innovative technologies unlike the rate at 2.1). Thus, in 2018, Japan experienced its strongest natural manufacturing sector, confronted by international competitors. decline since the end of World War II, with about 400,000 fewer Today, the labor shortage has pressed service-sector companies to Japanese individuals. If this trend continues, the country will have no experience mergers and acquisitions and to invest in more advanced more than 88 million inhabitants in 2065. technology. Artificial intelligence (AI) is also part of the solution and In this context of a declining and aging population, the current the government, together with the private sector, is heavily investing unemployment rate is 2.4% and, according to statistics from the in research programs. Japanese Ministry of Health, Labour and Welfare, the However, even if all these solutions are implemented, they will not unemployment/job-seeker ratio was 1.63 in January 2019: for every completely solve the labor shortage. That said, with a smaller 100 job seekers, 163 jobs remained unfilled, particularly in the fields population in the coming years, Japan may not need as many of construction, catering, hospitality, retail sales and personal care workers as today. And although perfect service is an important part services. Japan, however, remains relatively closed and it is difficult of Japan’s landscape, the country could survive with fewer for foreigners to find their place. employees in restaurants, shops or offices. However, on the public accounts’ side, Japan faces a hard Possible Solutions Foreseen by the Government challenge as fewer workers will have to pay higher taxes to support a growing aging population in need of pensions and healthcare In 2015, Prime Minister Shinzo Abe announced measures to services. Hospitals, nursing homes and construction sites already stabilize the population at 100 million by 2065, including creation of lack employees and opening doors to more foreign workers can be more daycare centers for children and paternity leave to encourage part of the solution. women to have more children while working, yet the fertility rate hasn’t increased. Toward an Understated Immigration Policy Adding more women to the workforce is another solution. In 2014, “Womenomics” was aiming at “building a society where women For more than 200 years (1633-1853), in order to eliminate any shine”, but positive results are still pending. While the female labor risk of foreign or religious influences perceived as threats to the force participation rate rose to 51% in 2018, women are still too ruling class, Japan implemented its “Sakoku” seclusion policy, often offered non-regular contracts with low salaries (according to closing itself off from the world, and thus developed a strong internal an OECD study in 2017, women in Japan are paid 24.5% less than homogeneity. The few foreigners who traded with the country were men) and are still underrepresented in managerial positions (only allowed to do so only in specific areas, while Japanese citizens could 4% are women). Therefore, many more incentives, such as legally not leave their country without special permission. This distancing of binding quotas, have to be implemented to accelerate women’s “the other”, which has long made it possible to limit the permeability employment. of foreign cultures, still exists in this island country. All governments The Japanese government is also considering raising the have always been reluctant to practice a clear immigration policy and retirement age from 65 now to 70 or even 75 as a solution to the it is a struggle to change this situation dramatically. labor crunch. As underlined by a recent OECD study, it is also This is what was attempted, however timidly, in the 1980s when necessary to “gradually increase the mandatory retirement age as the authorities, in need of plant workers, sought to attract the this will reduce the risk that older workers are re-hired as non- descendants of Japanese citizens who had emigrated to South regular workers” with a lower salary, as is the case today. America in the early 20th century. In the midst of an economic crisis Another possibility is to increase labor productivity. In 2017, Japan at home, Brazilians and Peruvians came to work in Japan’s factories. https://www.jef.or.jp/journal/ Japan SPOTLIGHT • July / August 2019 43 COVER STORY 10
CHART 1 Trends in number of international students by institutional type (as of each May 1) n t p s n 290 000 2 0 000 270 000 260 000 T nu nt nat nal stu nts T nu nt nat nal stu nts 250 000 G a uat sc l 240 000 239 2 7 230 000 n s ty n g a uat /Jun c ll g / ll g 220 000 tec n l gy 210 000 208,379 Sp c al t a ning c ll g s 200 000 1 190 000 n s ty p pa at y c u s 1 4 155 1 0 000
163 697 161 4 170 000 H g ucat n nst tut ns 16 145 171 122 160 000 Japan se languag nst tut s 152,062 150 000 141 774 13 075 140 000 132 720 139,185 137 756 135 519 130 000 121 12 117 302 117 927 120 000 123 29 109 50 11 49 110 000 100 000 95 550 90 000 7 12 74 323 0 000 72 665 71 244 71 361 69 339 67 10 67 7 2 69 405 64 011 64 774 63 437 63 175 70 000 62 311 62 159 6 165 55 755 57 911 53 7 7 53 47 56,317 60 000 52 405 52 921 51 047 51 29 50 321 1 4 561 50 235 45 066 44 970 50 000 39 502 41 347 39 097 39 749 39 641 39 567 41 396 30 612 35 405 43 47 40 000 31 251 31 592 32 666 30 27 30 910 32 626 39 979 25 477 25 504 2 542 29 514 25 622 3 654 25 643 23 677 25 009 25 052 25 159 26 160 25 146 26 229 30 000 22 154 21 364 25 167 1 631 29 227 1 710 27 72 15 009 16 390 25 753 27 914 25 463 24 5 6 13 4 6 23 5 5 25 197 20 000 12 410 11 246 13 16 15 004 22 679 12 324 23 33 21 562 22 399 24 092 10 42 9 03 12 574 16 592 17 7401 645 19 779 19 56 20 4 3 21 233 7 201 291 10 56 6 916 15 17 173 10 000 5 693 6 216 035 9 354 12 3 3 2 293 3 0 6 5 3 4 6 3 12 540 12 193 12 136 11 03 1 40 1 27 1 22 1 644 1 563 2 01 2 34 2 235 2 140 1 619 1 5 7 2 027 2 197 2 607 3 905 9 725 999 4 590 5 043 7 197 7 63 6 139 5 656 0 30 1 604 2 424 3 502 4 316 19 3 19 4 19 5 19 6 19 7 19 19 9 1990 1991 1992 1993 1994 1995 1996 1997 199 1999 2000 2001 2002 2003 2004 2005 2006 2007 200 2009 2010 2011 2012 2013 2014 2015 2016 2017
y a Source: https://www.jasso.go.jp/en/about/statistics/intl_student_e/2017/__icsFiles/afieldfile/2017/12/25/data17_02_e.pdf
They received a special visa for “descendants of Japanese citizens”. Japan is foreign students. They represent a significant potential and Their integration, however, did not always go well, and many of them can be easily integrated in the Japanese private sector. In 10 years, eventually decided to leave Japan, in particular after the 2007 the share of students in the entire foreign population increased from financial crisis. 6.3% (131,789 student visas) in 2006 to 11% (257,739 student In the 1990s, workers from developing Asian countries arrived in visas) in 2016. There were 267,000 students in 2017. Japan for three-year “technical internships” under the “Technical Their number will continue to grow as many universities are Intern Training Program” (TITP) with the goal of learning about the striving to attract students, mainly from Asia, in order to survive, due technology and practices of Japanese companies. These internships to the negative demographic trend in Japan (Chart 1). These are actually real jobs. The duration of their stay was later increased students have been allowed to work part-time during the school year to five years and 230,000 “trainees” were working in Japan in 2016. and more recently full-time during the holidays. Universities are For highly-skilled foreigners, a specific point system visa was offering lectures on Japanese history and culture as well as courses introduced in 2012 to attract scientists, researchers, engineers and on Japanese-style job-hunting rules. According to a survey made by businessmen. The new “Immigration Control and Refugee the Japan Student Services Organization, it appears that 14,493 Recognition Act”, revised last December, now allows them to stay in students (31%) out of 46,559 foreign students who graduated from Japan for an indefinite period with their families. It establishes or finished programs at universities, graduate schools or other another category of visa that will accommodate, for five years and schools in 2016 found a position in Japan. with the possibility of a five-year extension, up to 345,000 foreign “blue collar” workers. A large part of this quota will come from the Correcting or Anticipating Problems “technical interns” already present in the country. The problem is that they will not be able to bring their families. However, is Japan ready to welcome many more foreigners? The Another population “reservoir” likely to bring “young blood” to Migrant Integration Policy Index (MIPEX) “evaluates and compares
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TABLE MIPEX 2015 ranking ang ang ang an ng S n an ng S n an ng S n 2014 S 2010 2014 S 2010 2014 S 2010
1 S n 7 0 13 n a 59 10 27 Sl n a 44 0
2 P tugal 75 1 15 Lu u g 57 2 27 G 44 2
3 alan 70 0 15 n t ng 57 6 27 Japan 44 1
4 nlan 69 2 17 an 54 1 30 at a 43
4 ay 69 1 1 S ut a 53 1 31 ulga a 42 3
6 ana a 6 1 19 I lan 52 1 32 P lan 41 5
7 lg u 67 2 20 Aust a 50 3 33 alta 40 2
Aust al a 66 0 21 S t lan 49 1 34 Sl a a 37 0
9 SA 63 1 22 st n a 46 1 34 L t uan a 37 1
10 G any 61 3 23 Hunga y 45 1 36 yp us 35 0
11 t lan s 60 23 I lan 45 37 Lat a 31 2
11 Spa n 60 0 23 pu l 45 3 3 Tu y 25 1
13 Italy 59 1 23 an a 45 1 Source: http://www.mipex.eu/key-findings what governments are doing to promote the integration of migrants”. work in certain activity sectors (nursing, in particular). Regarding In 2015, Japan poorly ranked 27th out of 38 countries as its children, the Japanese school system has seen a 50% increase in “integration policies remain under-developed, mostly local and foreign nationals in a 10-year period. In 2016, 34,335 children lacked limited to the employment and education of immigrants with Japanese language skills and some of them had problems respecting Japanese ancestry living in immigrant-dense neighborhoods (…) the school rules. Cities like Yokohama or Hamamatsu (where many Japan’s approach is (…) far behind other highly-developed foreign workers live) have already reacted and implemented countries” (Table). In recent years, Japanese media have reported language learning programs or dedicated teachers to explain the abuses by local employers, mainly small to medium-sized specific rules followed by Japanese schools. The Education Ministry businesses, asking trainees to work long hours below the minimum has recently decided to provide financial support to local wage and under inadequate safety standards. In 2017, a Ministry of governments, which are first in line to face these problems. As these Health, Labour and Welfare investigation showed that rules were not cases will increase in the coming years, Japan could draw on the respected at more than 4,000 locations, which resulted in the deaths experience of France, which created in the 1970s, when the country of 174 people between 2010 and 2017. As the first to be concerned, welcomed a high number of immigrants, several “Centers for the the private sector must therefore ensure equal work and equal wages Schooling of Newly Arrived Non-French Speaking Children”. They based on skills between foreigners and Japanese citizens. However, first conduct an evaluation of their oral and written abilities as well as according to the MIPEX, Japan lacks a dedicated anti-discrimination various school subjects. Those who cannot join a normal class are law or independent equality body. For victims of nationality, racial or orientated to special classes. The objective is to quickly integrate the religious discrimination, it is still very difficult to turn to justice. children into regular classes. During the first year, they mainly learn Sweden, first in the MIPEX ranking for its integration policies, the French language in small groups (maximum 15 pupils) for 9 to provides a good case study on this precise point. In 2009, the Anti- 15 hours per week. However, they are asked to follow, together with Discrimination Act replaced seven laws and an Equality Ombudsman French children, sports, music or arts classes that don’t require a was created to replace four equality bodies. The new system makes perfect fluency in French. This is a way to socialize with other it easier for victims of discriminations to ask for justice. children and facilitates their integration into French society. Learning the language is an essential element to living or working The success of educating adult newcomers is crucial to the in a Japanese environment and passing certifications required to success of their integration in Japan. Learning the Japanese
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CHART 2 Foreigners in Japan (15 & older) & reported foreign employees
p t pl y s HL gn s 15 an l OJ pl y nt at
2 500 000 2 341 65 2 175 947 2 013 023 2 037 767 1 9 9 475 1 943 30 1 95 520 1 3 412 1 933 705 2 000 000 1 52 196 54 6 49 1 500 000 44 6 40 7 1 27 670 3 1 36 36 2 1 0 3 769 33 4 2 3 1 000 000 907 96 24 2 7 7 627 717 504 649 9 2 6 6 246 6 2 450 562 1 4 6 39 500 000
0 200 2009 2010 2011 2012 2013 2014 2015 2016 2017
Comparison of Ministry of Health, Labour and Welfare totals with working-age foreign population and hypothetical employment rate Note: The employment rate was calculated using the figures in the chart. Source: Ministry of Justice 2009–2018; Ministry of Health, Labour and Welfare 2009–2018
language and customs makes it easier to understand the society, to aging populations, will soon compete to attract more skilled and be accepted by the local population and to find a place in this unskilled foreign workers. As a matter of fact, the minimum wage country through work and social interactions. If their company differential between Japan and other Asian countries is gradually doesn’t provide Japanese language lessons, foreigners rely on decreasing: it was 14 times higher than China in 2005, but only 3.9 municipalities or NPOs where volunteers teach for free or for a very times higher in 2016, according to the Daiichi Health Research low fee. Japan can learn from Canada regarding well-organized and Institute. Another study, conducted by the Institute for Management federal, provincial and territorial government-funded language Development, a top-ranked business school in Switzerland, programs offered to immigrants. “assesses how 63 economies (…) develop, attract and retain highly- The Japanese education minister is starting to take action in this skilled professionals”. The result is alarming: Japan ranks 29th area and recently announced the creation in 2020 of a nationally among 63 countries, showing less appeal for high-level foreign recognized accreditation program for Japanese language teachers, workers than Switzerland (1st) and Denmark (2nd), or than with a 2020 Japanese language programs budget three times higher Singapore (13th), Hong Kong (18th) and Taiwan (27th) in Asia. (1.4 billion yen) than the 2019 one. When arriving in Japan, a foreigner alone will encounter problems Challenge for a Country With a Homogeneous renting accommodation or opening a bank account. Farmers or Population & Culture manufacturing companies often provide cheap housing for their workers, but it is almost impossible for a foreigner to rent a room by As of Jan. 1, 2018, 2.5 million foreigners were living in Japan and himself. Luckily, an activity that was previously reserved for richer 1.28 million (of whom 30% are Chinese nationals) worked there. expats is now expanding to other categories of foreigners: companies This represents only 2% of the population, an extremely small like JTB Corp. are providing services to help newcomers find a place to proportion compared to 39% in Singapore, 16% in France, and even live, register at the town hall or understand where shops and medical 4% in South Korea. It will be difficult not to change government services are located in their area. This kind of support, if not too policies in the short or medium term, especially since local expensive, is very important for newly arrived foreigners. governments seem determined to move forward (Chart 2). A survey Japan should quickly tackle these obstacles to become an in the Yomiuri newspaper conducted in January 2019 confirms that attractive destination. Otherwise neighboring countries like China, the aforementioned local governments are mostly (79%) in favor of Taiwan and South Korea, which are also facing an increase in their the arrival of foreign workers because of the shortage of manpower
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in their industries. For 70% of them, however, the reception of these expand overseas markets, integrate new foreign acquisitions and foreign workers is a concern because it requires the establishment of increase profitability. A few years ago, Howard Stringer (Sony Corp.), basic infrastructure that has not existed to date. They also expect Stuart Chambers and Craig Naylor (both Nippon Sheet Glass), Carlos help from the central government, in particular “funding to work on Ghosn (Renault-Nissan) and Michael Woodford (Olympus) – even measures for accepting foreign residents” (69%). though their experiences ended badly – and today Christophe Weber The opening of borders has likewise been most welcome by the (Takeda Pharmaceutical) are proving that it is possible to manage a industrial world, which sees it as a quick solution to running its Japanese corporation, although it remains challenging. factories and construction sites. However, it is still difficult to have Moreover, companies like Rakuten and First Retailing have the whole country admit that the arrival of foreign workers will adopted English as their official corporate language for internal benefit Japan. The consensus is still far from unanimous: a poll communications, while Honda Motor and Bridgestone are planning conducted by the Yomiuri newspaper in April 2019 underlined that soon to do so. This measure is helping with overseas expansion and still 40% of respondents were opposed to accepting more foreign their businesses can more easily hire and retain foreign workers in workers: “59% said they were reluctant to receive nursing care from Japan. foreigners and 53% expressed a reluctance to live near foreigners.” Therefore one of the future challenges will be to find strategies to Conclusion build bridges between the Japanese and the different groups of foreigners living and working in the country if Japan wishes to avoid Will Japan be able to unite history and nationalism for much the “ghettoisation of society”. longer? Probably not. The country is in a phase of doubt and slow Politically there is no shortage of critics. Japan First, a small, change. At the end of the 19th century, Japan opened and adapted to right-wing party, advocates for “national interests first” while many the outside world by learning new techniques and new ways of supporters of Abe want to limit immigration so as not to threaten the thinking from Europe and the United States, integrating and blending “current ethnic homogeneity” and “not to risk increasing crime them into its traditions to become a major global industrial power. rates”. The media also bear a responsibility for the negative Cultures are in permanent evolution: Japanese society dramatically perception of immigration. They often cover problems related to the changed between 1868 and the end of the 20th century. In the 21st influx of migrants in other parts of the world and tend to convey the century, more foreigners settling in Japan will certainly have an idea that the country is safe because Japan is currently out of this impact on society. If conditions are met with real financial investment trend. There are too few programs showing the positive sides of from the government for better inclusion of foreigners into Japanese immigration in those countries. society (mainly Japanese language and customs education for However, Japanese society is changing and is slowly opening up. foreigners, better foreign language education in Japanese schools, Marriages between foreigners and Japanese nationals account for equal pay for equal work and anti-discrimination regulations), Japan about 6% of all marriages. About one in every 50 babies born in can meet this new challenge positively. Japan is bicultural. Today’s bicultural youth is more visible and even The sharp increase in inbound tourism in a few years’ time (10 making headlines, like tennis player Naomi Osaka (Japanese- million in 2013, 31 million in 2018, 40 million targeted in 2020) is American Haitian), who won the US and Australian Opens; sprinter helping Japanese people to become more familiar with foreigners. Asuka Cambridge (Japanese-Jamaican); baseball player Yu Darvish The Tokyo 2020 Olympic Games, as well as the Osaka World Expo (Japanese-Iranian); and judo star Mashu Baker (Japanese- 2025 on the horizon, are factors accelerating change. They can be American). As world champions, they show the changing face of considered a first test, of limited duration of course, but to be Japan, as did former Miss Japan Ariana Miyamoto (Japanese- monitored closely because they will allow for a “real-life experiment” American) in 2015 and Miss World Japan Priyanka Yoshikawa to test the interactions between Japanese and foreigners. (Japanese-Indian) in 2016, although both have been criticized for In this context, there is no doubt that people with skills in foreign “not being Japanese enough”. languages and intercultural relations will be solicited, both in the In the Japanese business world, there are fewer foreign executives business world and in society in general, to take part in this than in other OECD countries. The reason may be that they are facing important evolution for a sustainable future in Japan. a huge challenge in terms of communication (both linguistic and cultural) and understanding of the Japanese-style management Valerie Moschetti, an expert in business development and public affairs, processes. However, in a market that has been stagnant for many worked for 10 years in Africa to implement industrial and financial projects. In Japan since 2007, she specialized in international partnerships at the EU-Japan years and is shrinking due to demographics, Japanese corporations Centre for Industrial Cooperation. She now advises the private sector on have been opening their doors to foreigners since the beginning of entering and expanding in the Japanese, European and African markets through the 21st century. They expect them to bring changes and to help a governmental affairs strategy and business partnerships.
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