COVER STORY • Exploring for the Best Models of an Aging Society – Lessons from Japanese Experience • 10J

apan: Immigration, aRemedy for the Aging
Population?

By Valerie Moschetti

There are 126 million inhabitants of Japan. Life expectancy isamong the highest in the world: 87 years for women and 81 years
for men. By 2040, more than 35% of Japanese people will be 65 andover (28% today). Meanwhile, the fertility rate continues to drop tocurrently 1.4 children per woman (with a population replacement
rate at 2.1). Thus, in 2018, Japan experienced its strongest natural
decline since the end of World War II, with about 400,000 fewer
Japanese individuals. If this trend continues, the country will have no
more than 88 million inhabitants in 2065.
In this context of a declining and aging population, the current
unemployment rate is 2.4% and, according to statistics from theJapanese Ministry of Health, Labour and Welfare, theunemployment/job-seeker ratio was 1.63 in January 2019: for every
100 job seekers, 163 jobs remained unfilled, particularly in the fields
of construction, catering, hospitality, retail sales and personal careservices. Japan, however, remains relatively closed and it is difficult
for foreigners to find their place.

Possible Solutions Foreseen by the Government
In 2015, Prime Minister Shinzo Abe announced measures tostabilize the population at 100 million by 2065, including creation of
more daycare centers for children and paternity leave to encourage
women to have more children while working, yet the fertility rate
hasn’t increased.
Adding more women to the workforce is another solution. In 2014,“Womenomics” was aiming at “building a society where womenshine”, but positive results are still pending. While the female labor
force participation rate rose to 51% in 2018, women are still too
often offered non-regular contracts with low salaries (according toan OECD study in 2017, women in Japan are paid 24.5% less thanmen) and are still underrepresented in managerial positions (only
4% are women). Therefore, many more incentives, such as legallybinding quotas, have to be implemented to accelerate women’s
employment.
The Japanese government is also considering raising theretirement age from 65 now to 70 or even 75 as a solution to thelabor crunch. As underlined by a recent OECD study, it is also
necessary to “gradually increase the mandatory retirement age as
this will reduce the risk that older workers are re-hired as nonregular workers” with a lower salary, as is the case today.
Another possibility is to increase labor productivity. In 2017, Japan
https://www.jef.or.jp/journal/

Author Valerie Moschetti

ranked 20th among OECD members for labor productivity, mainly
due to the non-manufacturing sector. It appears that Japaneseservice-sector companies have not invested enough in productive
capital and technology during the past 20 years. They employed too
many people and ignored innovative technologies unlike the
manufacturing sector, confronted by international competitors.
Today, the labor shortage has pressed service-sector companies toexperience mergers and acquisitions and to invest in more advanced
technology. Artificial intelligence (AI) is also part of the solution andthe government, together with the private sector, is heavily investingin research programs.
However, even if all these solutions are implemented, they will notcompletely solve the labor shortage. That said, with a smaller
population in the coming years, Japan may not need as many
workers as today. And although perfect service is an important partof Japan’s landscape, the country could survive with fewer
employees in restaurants, shops or offices.
However, on the public accounts’ side, Japan faces a hardchallenge as fewer workers will have to pay higher taxes to support a
growing aging population in need of pensions and healthcare
services. Hospitals, nursing homes and construction sites alreadylack employees and opening doors to more foreign workers can bepart of the solution.

Toward an Understated Immigration Policy
For more than 200 years (1633-1853), in order to eliminate any
risk of foreign or religious influences perceived as threats to theruling class, Japan implemented its “Sakoku” seclusion policy,
closing itself off from the world, and thus developed a strong internal
homogeneity. The few foreigners who traded with the country wereallowed to do so only in specific areas, while Japanese citizens could
not leave their country without special permission. This distancing of“the other”, which has long made it possible to limit the permeabilityof foreign cultures, still exists in this island country. All governments
have always been reluctant to practice a clear immigration policy and
it is a struggle to change this situation dramatically.
This is what was attempted, however timidly, in the 1980s when
the authorities, in need of plant workers, sought to attract thedescendants of Japanese citizens who had emigrated to SouthAmerica in the early 20th century. In the midst of an economic crisis
at home, Brazilians and Peruvians came to work in Japan’s factories.
Japan SPOTLIGHT • July / August 201943

COVER STORY 10

CHART 1

Trends in number of international students by institutional type (as of each May 1)(Unit: person)
290,000
280,000
267,042
270,000
The
numberofinternational
students
260,000
The number of international students
250,000
Graduate school
240,000
239,287
230,000
University (Undergraduate)/Junior college/College of
220,000
technology
208,379
210,000
Specialized
training colleges
200,000
188,384
190,000
184,155
University preparatory course
180,000
170,000
163,697 161,848
Higher education institutions
168,145
171,122160,000
152,062
Japaneselanguageinstitutes
150,000
141,774
138,075
132,720140,000
139,185
137,756
135,519
130,000
121,812117,302
117,927
123,829
120,000
109,508
118,498
110,000
95,550100,000
90,00080,02078,812
74,323
72,665 71,244
80,00071,361 69,339
78,65867,782 69,405
67,10864,01162,311 64,774 63,437 62,159 63,175
70,00068,16555,75557,911
56,317
58,77160,00052,405 53,787 53,847 52,921 51,047 51,298
50,321
50,23548,561
44,97045,06650,00046,37339,502
41,34741,39639,097 39,749 39,641 39,567
35,40543,47840,00030,612
31,251
32,66630,910 31,592
32,62639,97928,542 29,514 30,278
38,65425,62225,643
23,677 25,009 25,477 25,504 25,052 25,159 26,160
25,146 26,229
25,16730,00022,154
21,36429,227
18,631
18,71027,872 25,463
24,586
16,39015,00925,753 27,914
25,19720,00013,48615,004
23,833
22,679 23,585 12,324
24,092
12,41021,562 22,399
11,246
21,233
12,574 13,816
16,592 17,740
10,42818,645 19,779 19,856 20,483
8,291 9,803
8,815
17,173
6,916
10,000 5,693 6,216 7,201 6,838 8,035 9,354 10,56812,383
2,293 2,140 1,619 1,587 2,027 2,197 2,607 3,086 3,220
2,348
2,235
2,018
12,193
1,840
1,827
1,822
12,136
1,644
1,563
12,54011,038 9,725
5,384
999
3,905
4,590
7,638 6,139 5,656
5,043 7,197
0 830 1,604
2,424 3,502 4,316
19 19 19 19 19 19 19 19 19 19 19 19 19 19 19 19 19 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20
83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17(year)

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”.
Their integration, however, did not always go well, and many of themeventually decided to leave Japan, in particular after the 2007
financial crisis.
In the 1990s, workers from developing Asian countries arrived inJapan for three-year “technical internships” under the “TechnicalIntern Training Program” (TITP) with the goal of learning about thetechnology and practices of Japanese companies. These internships
are actually real jobs. The duration of their stay was later increased
to five years and 230,000 “trainees” were working in Japan in 2016.
For highly-skilled foreigners, a specific point system visa wasintroduced in 2012 to attract scientists, researchers, engineers andbusinessmen. The new “Immigration Control and Refugee
Recognition Act”, revised last December, now allows them to stay inJapan for an indefinite period with their families. It establishes
another category of visa that will accommodate, for five years andwith 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“technical interns” already present in the country. The problem isthat they will not be able to bring their families.
Another population “reservoir” likely to bring “young blood” to
44 Japan SPOTLIGHT • July / August 2019Japan is foreign students. They represent a significant potential andcan be easily integrated in the Japanese private sector. In 10 years,
the share of students in the entire foreign population increased from
6.3% (131,789 student visas) in 2006 to 11% (257,739 student
visas) in 2016. There were 267,000 students in 2017.
Their number will continue to grow as many universities are
striving to attract students, mainly from Asia, in order to survive, due
to the negative demographic trend in Japan (Chart 1). Thesestudents have been allowed to work part-time during the school year
and more recently full-time during the holidays. Universities areoffering lectures on Japanese history and culture as well as courses
on Japanese-style job-hunting rules. According to a survey made by
the Japan Student Services Organization, it appears that 14,493
students (31%) out of 46,559 foreign students who graduated fromor finished programs at universities, graduate schools or otherschools in 2016 found a position in Japan.

Correcting or Anticipating Problems
However, is Japan ready to welcome many more foreigners? The
Migrant Integration Policy Index (MIPEX) “evaluates and comparesCOVER STORY 10TABLE

MIPEX 2015 ranking
Ranking
2014

Score

ChangeSince
2010*

Ranking
2014

Score

ChangeSince
2010*

Ranking
2014

Score

Change
Since
2010*

1

Sweden78

013

Denmark

59

10

27

Slovenia

44

02

Portugal

75

1

15

Luxembourg

57

2

27

Greece44

2

3

New Zealand

70

0

15

United Kingdom

57

6

27

Japan

44

1

4

Finland69

2

17

France54

130

Croatia

43

4

Norway69

118South Korea

53

1

31

Bulgaria

42

3

6

Canada68

1

19

Ireland52

1

32

Poland41

5

7

Belgium

67

2

20

Austria

50

3

33

Malta

40

2

8

Australia

66

0

21

Switzerland

49

1

34

Slovakia

37

0

9

USA

63

1

22

Estonia46

1

34

Lithuania

37

1

10

Germany

61

3

23

Hungary45

1

36

Cyprus35

011Netherlands

60

8

23

Iceland45

37

Latvia

31

2

11

Spain

60

0

23

Czech Republic

45

3

38

Turkey

25

1

13

Italy

59

1

23

Romania45

1

Source: http://www.mipex.eu/key-findings

what governments are doing to promote the integration of migrants”.
In 2015, Japan poorly ranked 27th out of 38 countries as its“integration policies remain under-developed, mostly local andlimited to the employment and education of immigrants withJapanese ancestry living in immigrant-dense neighborhoods (…)
Japan’s approach is (…) far behind other highly-developed
countries” (Table). In recent years, Japanese media have reported
abuses by local employers, mainly small to medium-sizedbusinesses, asking trainees to work long hours below the minimum
wage and under inadequate safety standards. In 2017, a Ministry of
Health, Labour and Welfare investigation showed that rules were notrespected at more than 4,000 locations, which resulted in the deathsof 174 people between 2010 and 2017. As the first to be concerned,
the private sector must therefore ensure equal work and equal wages
based on skills between foreigners and Japanese citizens. However,according to the MIPEX, Japan lacks a dedicated anti-discrimination
law or independent equality body. For victims of nationality, racial or
religious discrimination, it is still very difficult to turn to justice.
Sweden, first in the MIPEX ranking for its integration policies,
provides a good case study on this precise point. In 2009, the AntiDiscrimination Act replaced seven laws and an Equality Ombudsman
was created to replace four equality bodies. The new system makes
it easier for victims of discriminations to ask for justice.
Learning the language is an essential element to living or working
in a Japanese environment and passing certifications required towork in certain activity sectors (nursing, in particular). Regardingchildren, the Japanese school system has seen a 50% increase inforeign nationals in a 10-year period. In 2016, 34,335 children lacked
Japanese language skills and some of them had problems respecting
the school rules. Cities like Yokohama or Hamamatsu (where many
foreign workers live) have already reacted and implemented
language learning programs or dedicated teachers to explain thespecific rules followed by Japanese schools. The Education Ministry
has recently decided to provide financial support to local
governments, which are first in line to face these problems. As thesecases will increase in the coming years, Japan could draw on theexperience of France, which created in the 1970s, when the country
welcomed a high number of immigrants, several “Centers for the
Schooling of Newly Arrived Non-French Speaking Children”. They
first conduct an evaluation of their oral and written abilities as well as
various school subjects. Those who cannot join a normal class areorientated to special classes. The objective is to quickly integrate thechildren into regular classes. During the first year, they mainly learn
the French language in small groups (maximum 15 pupils) for 9 to
15 hours per week. However, they are asked to follow, together with
French children, sports, music or arts classes that don’t require aperfect fluency in French. This is a way to socialize with otherchildren and facilitates their integration into French society.
The success of educating adult newcomers is crucial to thesuccess of their integration in Japan. Learning the JapaneseJapan SPOTLIGHT • July / August 201945

COVER STORY 10

CHART 2Foreigners in Japan (15 & older) & reported foreign
employees
Reported employees (MHLW)

Foreigners 15 and older (MOJ)

Employment rate

2,500,000

2,000,000

2,341,865
2,013,023 1,989,475
1,943,308 1,895,520

1,852,196

1,883,412 1,933,705

54.6%
44.6%

1,500,000

1,000,000

500,00002,037,767

28.3%
24.2%
486,3982008

562,818

2009

33.4%

36.8%

36.2%

2,175,947

38.1%

49.8%
1,278,670

40.7%
1,083,769
907,896649,982

686,246

682,450

717,504

2010

2011

2012

2013

787,627

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, tobe accepted by the local population and to find a place in thiscountry through work and social interactions. If their company
doesn’t provide Japanese language lessons, foreigners rely onmunicipalities or NPOs where volunteers teach for free or for a very
low fee. Japan can learn from Canada regarding well-organized andfederal, provincial and territorial government-funded language
programs offered to immigrants.
The Japanese education minister is starting to take action in thisarea and recently announced the creation in 2020 of a nationallyrecognized accreditation program for Japanese language teachers,with a 2020 Japanese language programs budget three times higher(1.4 billion yen) than the 2019 one.
When arriving in Japan, a foreigner alone will encounter problems
renting accommodation or opening a bank account. Farmers or
manufacturing companies often provide cheap housing for theirworkers, but it is almost impossible for a foreigner to rent a room byhimself. Luckily, an activity that was previously reserved for richer
expats is now expanding to other categories of foreigners: companies
like JTB Corp. are providing services to help newcomers find a place to
live, register at the town hall or understand where shops and medical
services are located in their area. This kind of support, if not too
expensive, is very important for newly arrived foreigners.
Japan should quickly tackle these obstacles to become an
attractive destination. Otherwise neighboring countries like China,
Taiwan and South Korea, which are also facing an increase in their46 Japan SPOTLIGHT • July / August 2019aging populations, will soon compete to attract more skilled andunskilled foreign workers. As a matter of fact, the minimum wage
differential between Japan and other Asian countries is gradually
decreasing: it was 14 times higher than China in 2005, but only 3.9times higher in 2016, according to the Daiichi Health ResearchInstitute. Another study, conducted by the Institute for Management
Development, a top-ranked business school in Switzerland,“assesses how 63 economies (…) develop, attract and retain highlyskilled professionals”. The result is alarming: Japan ranks 29th
among 63 countries, showing less appeal for high-level foreign
workers than Switzerland (1st) and Denmark (2nd), or thanSingapore (13th), Hong Kong (18th) and Taiwan (27th) in Asia.

Challenge for a Country With a Homogeneous
Population & Culture
As of Jan. 1, 2018, 2.5 million foreigners were living in Japan and1.28 million (of whom 30% are Chinese nationals) worked there.
This represents only 2% of the population, an extremely small
proportion compared to 39% in Singapore, 16% in France, and even
4% in South Korea. It will be difficult not to change government
policies in the short or medium term, especially since local
governments seem determined to move forward (Chart 2). A survey
in the Yomiuri newspaper conducted in January 2019 confirms thatthe aforementioned local governments are mostly (79%) in favor of
the arrival of foreign workers because of the shortage of manpower

COVER STORY 10

in their industries. For 70% of them, however, the reception of these
foreign workers is a concern because it requires the establishment ofbasic infrastructure that has not existed to date. They also expect
help from the central government, in particular “funding to work on
measures for accepting foreign residents” (69%).
The opening of borders has likewise been most welcome by theindustrial world, which sees it as a quick solution to running its
factories and construction sites. However, it is still difficult to havethe whole country admit that the arrival of foreign workers will
benefit Japan. The consensus is still far from unanimous: a poll
conducted by the Yomiuri newspaper in April 2019 underlined thatstill 40% of respondents were opposed to accepting more foreign
workers: “59% said they were reluctant to receive nursing care fromforeigners and 53% expressed a reluctance to live near foreigners.”
Therefore one of the future challenges will be to find strategies tobuild bridges between the Japanese and the different groups offoreigners living and working in the country if Japan wishes to avoid
the “ghettoisation of society”.
Politically there is no shortage of critics. Japan First, a small,right-wing party, advocates for “national interests first” while many
supporters of Abe want to limit immigration so as not to threaten the“current ethnic homogeneity” and “not to risk increasing crime
rates”. The media also bear a responsibility for the negative
perception of immigration. They often cover problems related to the
influx of migrants in other parts of the world and tend to convey theidea that the country is safe because Japan is currently out of thistrend. There are too few programs showing the positive sides ofimmigration in those countries.
However, Japanese society is changing and is slowly opening up.
Marriages between foreigners and Japanese nationals account for
about 6% of all marriages. About one in every 50 babies born inJapan is bicultural. Today’s bicultural youth is more visible and evenmaking headlines, like tennis player Naomi Osaka (JapaneseAmerican Haitian), who won the US and Australian Opens; sprinter
Asuka Cambridge (Japanese-Jamaican); baseball player Yu Darvish(Japanese-Iranian); and judo star Mashu Baker (JapaneseAmerican). As world champions, they show the changing face ofJapan, as did former Miss Japan Ariana Miyamoto (JapaneseAmerican) in 2015 and Miss World Japan Priyanka Yoshikawa(Japanese-Indian) in 2016, although both have been criticized for“not being Japanese enough”.
In the Japanese business world, there are fewer foreign executives
than in other OECD countries. The reason may be that they are facing
a huge challenge in terms of communication (both linguistic andcultural) and understanding of the Japanese-style management
processes. However, in a market that has been stagnant for many
years and is shrinking due to demographics, Japanese corporations
have been opening their doors to foreigners since the beginning of
the 21st century. They expect them to bring changes and to help

expand overseas markets, integrate new foreign acquisitions andincrease profitability. A few years ago, Howard Stringer (Sony Corp.),
Stuart Chambers and Craig Naylor (both Nippon Sheet Glass), Carlos
Ghosn (Renault-Nissan) and Michael Woodford (Olympus) – eventhough their experiences ended badly – and today Christophe Weber(Takeda Pharmaceutical) are proving that it is possible to manage aJapanese corporation, although it remains challenging.
Moreover, companies like Rakuten and First Retailing haveadopted English as their official corporate language for internal
communications, while Honda Motor and Bridgestone are planningsoon to do so. This measure is helping with overseas expansion andtheir businesses can more easily hire and retain foreign workers inJapan.

Conclusion
Will Japan be able to unite history and nationalism for much
longer? Probably not. The country is in a phase of doubt and slow
change. At the end of the 19th century, Japan opened and adapted tothe outside world by learning new techniques and new ways ofthinking from Europe and the United States, integrating and blending
them into its traditions to become a major global industrial power.
Cultures are in permanent evolution: Japanese society dramaticallychanged between 1868 and the end of the 20th century. In the 21st
century, more foreigners settling in Japan will certainly have an
impact on society. If conditions are met with real financial investment
from the government for better inclusion of foreigners into Japanesesociety (mainly Japanese language and customs education forforeigners, better foreign language education in Japanese schools,
equal pay for equal work and anti-discrimination regulations), Japan
can meet this new challenge positively.
The sharp increase in inbound tourism in a few years’ time (10million in 2013, 31 million in 2018, 40 million targeted in 2020) is
helping Japanese people to become more familiar with foreigners.
The Tokyo 2020 Olympic Games, as well as the Osaka World Expo
2025 on the horizon, are factors accelerating change. They can beconsidered a first test, of limited duration of course, but to bemonitored closely because they will allow for a “real-life experiment”
to test the interactions between Japanese and foreigners.
In this context, there is no doubt that people with skills in foreign
languages and intercultural relations will be solicited, both in thebusiness world and in society in general, to take part in thisimportant evolution for a sustainable future in Japan.
Valerie Moschetti, an expert in business development and public affairs,
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
Centre for Industrial Cooperation. She now advises the private sector on
entering and expanding in the Japanese, European and African markets througha governmental affairs strategy and business partnerships.

Japan SPOTLIGHT • July / August 201947