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) nt psn 290000 20000 267,042 270000 260000 Te number of international students T nu ntnatnal stunts 250000 Grauate school 240000 23927 230000 Unversty (Unergrauate/Junior cllege/Cllege of 220000 technology 210000 208,379 Specialed training colleges 200000 1 190000 Unversty preparatoy curse 14155 10000 163697 1614 170000 Higher eucation institutions 16145 171122 160000 Japanese language insttuts 152,062 150000 141774 13075 140000 132720 139,185 137756 135519 130000 12112 117302 117927 120000 12329 10950 1149 110000 100000 95550 90000 712 80,020 74323 0000 72665 71244 71361 69339 6710 6772 69405 78,658 64011 64774 63437 63175 70000 62311 62159 6165 55755 57911 5377 5347 56,317 60000 52405 52921 51047 5129 50321 1 4561 50235 45066 44970 50000 39502 46,373 41347 39097 39749 39641 39567 41396 30612 35405 4347 40000 31251 31592 32666 3027 30910 32626 39979 25477 25504 2542 29514 25622 3654 25643 23677 25009 25052 25159 26160 25146 26229 30000 22154 21364 25167 1631 29227 1710 2772 15009 16390 25753 27914 25463 2456 1346 2355 25197 20000 12410 11246 1316 15004 22679 12324 2333 21562 22399 24092 1042 903 12574 16592 177401645 19779 1956 2043 21233 7201 291 1056 6916 15 17173 10000 5693 6216 035 9354 1233 2293 306 534 63 12540 12193 12136 1103 140 127 122 1644 1563 201 234 2235 2140 1619 157 2027 2197 2607 3,220 3905 9725 999 4590 5043 7197 763 6139 5656 0 30 1604 2424 3502 4316 193 194 195 196 197 19 199 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 ya 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 44 Japan SPOTLIGHT • July / August 2019 COVER STORY 10 TABLE MIPEX 2015 ranking ang ang ang anng Sn anng Sn anng Sn 2014 S 2010 2014 S 2010 2014 S 2010 1 Sn 7 0 13 na 59 10 27 Slna 44 0 2 Ptugal 75 1 15 Luug 57 2 27 G 44 2 3 alan 70 0 15 nt ng 57 6 27 Japan 44 1 4 nlan 69 2 17 an 54 1 30 ata 43 4 ay 69 1 1 Sut a 53 1 31 ulgaa 42 3 6 anaa 6 1 19 Ilan 52 1 32 Plan 41 5 7 lgu 67 2 20 Austa 50 3 33 alta 40 2 8 Austala 66 0 21 Stlan 49 1 34 Slaa 37 0 9 SA 63 1 22 stna 46 1 34 Ltuana 37 1 10 Gany 61 3 23 Hungay 45 1 36 ypus 35 0 11 tlans 60 8 23 Ilan 45 37 Lata 31 2 11 Span 60 0 23 pul 45 3 3 Tuy 25 1 13 Italy 59 1 23 ana 45 1 Source: http://www.mipex.eu/key-findings what governments are doing to promote the integration of migrants”.