Immigration: labour shortages prompt immigration reform in Japan
Last year, Japan turned to immigration reform to combat the ongoing labour shortage threatening its economic growth. The reform package, effective April 2019, was brought in to boost the number of workers in 14 blue-collar sectors by opening up immigration to foreign workers with ‘specified skills’. Working visas had predominantly previously been granted to high skill professionals such as lawyers and doctors, and resistance to long-term migration is still evident in the reforms.
In late 2019, as a result of Japan’s shrinking working-age population, there were 1.5 vacancies for every job applicant and many stores and companies had to reduce their hours and services for lack of human resources. Estimates suggest 6.4 million workers will leave the workforce by 2030 – when the percentage of the population over 65 is set to reach 30 per cent. The losses are likely to be from the blue-collar sectors specified by the recent reform. Japan also faces a stagnant birth rate of 1.4, significantly lower than the sustainable replacement rate of 2.1.
Yumiko Murakami, Head of the Organisation for Economic Cooperation and Development’s Tokyo Centre, says although ‘there is a very strong resistance to immigration in Japan… the reality is companies cannot find enough people to hire at this point’. She says the real need to secure labour has created a ‘strong economic incentive on the part of businesses and on the part of policymakers, and that’s why there was a big revision in the government’s stance on immigration’.
Forced labour and modern slavery still persists today in global supply chains and migrant workers are a vulnerable group
Anne Frances O’Donoghue
Co-Chair, IBA Immigration and Nationality Law Committee
The amendment to the Immigration Control and Refugee Recognition Act, pushed through by Prime Minister Shinzo Abe’s ruling Liberal Democratic Party in late 2018, is Japan’s most comprehensive reform of immigration policy since the 1990s. It comprises a set of policy guidelines and two amendments to existing legislation, creating two new visa statuses for foreign workers: Specified Skilled Worker (i) and (ii). Workers in the first category can stay up to five years in total, cannot bring their families, and must work in one of 14 specified industries, including construction and nursing. Those in category (ii) are only accepted in the construction and ship-related industries, but have no limit on their visa renewals and are permitted to bring their spouses and children.
The reform also created an Immigration and Foreign Residents Agency, replacing the legacy Immigration Bureau, to tackle integration policy formulation and implementation, as well as immigration control. Policy guidelines have been introduced, including requirements for employers to pay foreign workers equal wages to Japanese workers and to provide support for the workers to secure accommodation and undertake Japanese language classes.
The reform may suggest a significant shift in perspective for the Japanese government and for Japanese society in general, which has traditionally been conservative. However, the reform faced significant resistance. Murakami highlights that Prime Minister Abe had to clarify ‘not only once, but two or three times, that the immigration bill had nothing to do with long-term immigration – in fact he said this is not immigration law, this is facilitating guest workers who will all return to their countries after a specific period of time’.
The Japanese government has also considered implementing ongoing checks on the status of the labour shortage, so that the influx of foreign workers does not create an excess of labour. This would include reviewing the new immigration policies with a view to curtailing immigration for foreign workers once the market gaps have been filled.
But for Anne Frances O’Donoghue, Co-Chair of the IBA Immigration and Nationality Law Committee, ‘given the falling birth rates in Japan and the projected decline in their population, there should also be encouragement of permanent settlement for foreign workers. It should not only seek to secure short-term migrant workers.’
Murakami says ‘the reality is the birth rate has been going up in countries where immigration has been a major factor, but what may actually have even more significant meaning to the economy and society, is this idea of diversity of thought, which is key for innovation.’
Discussing countries like the United States, which has begun to block immigration by certain ethnic groups and nationalities, Murakami notes that ‘Japan struggles in a big way to promote innovation and entrepreneurship, and much of that is because people tend to have a very homogeneous background, the way they look at the world is very similar, because it’s a very homogeneous society.’
‘When you have a tight immigration policy, that narrows the type of people in your society and that’s going to have an impact on the innovative start-up space’, she adds.
Although the reform package should bolster the Japanese economy with an influx of 350,000 workers, commentators have highlighted the emphasis on short-term immigration as problematic. The reform is reminiscent of Japan’s Technical Intern Training Program, established in 1993, which allows companies to import foreign, temporary workers. The Program has raised concerns – including from the Japanese Justice Ministry – about workers’ rights.
Unable to leave an employer for another without fear of deportation, foreign workers on the Program have often worked longer hours at lower rates than Japanese nationals, with a lack of legal protection. Current technical interns are now able to apply for the first category of the new visas, which will allow them to move companies.
Hideaki Roy Umetsu is Vice-Chair of the IBA Asia Pacific Regional Forum and a partner at Mori Hamada & Matsumoto, and undertakes pro bono work for refugees and foreign workers. He hopes that the recent reform will tackle these issues by protecting foreign workers’ pay, ensuring workers can move between companies, and blocking companies with previous labour law violations from hiring foreign workers on the Specified Skilled Worker statuses.
O’Donoghue, who is also Managing Director and Principal Lawyer at Immigration Solutions Lawyers in Sydney, stresses the importance of workers’ rights being protected with the reform package: ‘These measures not only need to be implemented, but strongly enforced and administered. Forced labour and modern slavery still persists today in global supply chains and migrant workers are a vulnerable group’.
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