Japan Expands the Global Commute

Stephen DeAngelis

December 8, 2006

Japan has been a xenophobic country for millennia. A growing life expectancy coupled with a declining birth rate, however, has forced Japan to look beyond its borders for workers. While it has pursued a strategy of automation (using robots to replace workers), that strategy doesn’t work in the healthcare industry. Yuka Hayashi, writing in the Wall Street Journal, notes that a nursing shortage and a declining labor force has cracked the door for foreign caregivers [“Japan Eases Up on Foreign Workers,” 30 November 2006].

Japan’s shrinking work force is making the government do something it has long resisted: open the door just a little more to foreign workers. It’s not clear whether the opening will keep getting wider over time, but agreements Japan has made with two Southeast Asian nations in the past three months show that it knows it has no choice but to let in more foreigners than in the past. Tokyo has reached economic partnership deals with Indonesia and the Philippines that allow nurses and caregivers from there to work in Japan. In the latest agreement, which includes reductions in trade tariffs, Japan Tuesday approved the entry of an unspecified number of Indonesian workers.

Japan’s appetite for Filipino nurses (matched by the U.S.’s) has been growing for years (creating a nursing shortage in the Philippines at the same time). As I have noted earlier [Updates on the Global Commute], the Philippines is the master of the global commute. Still, when Hayashi talks about a “crack in the door” of Japanese immigration, she wasn’t kidding. The numbers are extremely small.

On Sept. 9, Japan made an agreement with the Philippines that lets as many as 1,000 Filipino nurses and caregivers come to Japan over a two-year period, starting in 2007. Jakarta hopes Japan will accept a similar number of Indonesians. … The agreement, aimed at strengthening bilateral ties in trade, investment and other economic areas, also calls for Japan to accept Indonesian trainees and interns in hotel-related services. The two pacts signal a growing official recognition that Japan needs to let in foreign workers. Like their counterparts in many other industrialized nations, Japanese businesses over the past decade have struggled to find workers for physically demanding employment in fields such as manufacturing and agriculture. To fill some of these jobs, Japan has given work visas to Brazilians and Peruvians of Japanese descent. In addition, many workers from China and other parts of Asia work in Japan as “students” and “trainees,” instead of officially being in the country for work. Japan’s problem became much more serious after its population began to decline last year because of low birthrates. The number of working-age Japanese — those between 15 and 64 — is projected to shrink to 70 million by 2030, from 85 million in 2005, according to the government’s National Institute of Population and Social Security Research of Japan. Japanese companies are planning to employ more women — a smaller percentage of whom work compared with those in many other industrialized countries — and elderly people. But corporate Japan thinks this won’t be enough. “To respond to an expected decline in the labor population, we need to consider using foreign workers,” Hiroshi Okuda, chairman of Toyota Motor Corp., said earlier this year when he was chairman of the Japan Business Federation, an influential lobby group.

Japan is undoubtedly moving slowly because of what it sees in Europe, who for decades has allowed foreign workers in but has never assimilated them into the community. The result is growing discontent and frustration. Europe’s foreign workers came mainly from eastern Europe (during the cold war) and northern Africa. Foreign workers eager to become part of the Japanese economy are from Asian nations with high population rates.

Governments of Asian countries with younger populations and lower average wages have asked Japan to open its economy to their workers. Japan’s labor shortage is acute in the hospital and nursing sectors, where the number of elderly needing care is rising as the population ages. A survey conducted by Japan’s four major hospital associations last year found that roughly half of the hospitals surveyed experienced either constant or occasional shortages of nurses. And 69% of the hospitals said hiring nurses was difficult because of low wages, tough working conditions, and the small number of qualified nurses. Still, some experts doubt the agreements with the Philippines and Indonesia will significantly increase the number of foreign nurses in Japan, because of the high hurdles the pacts impose. The agreement with the Philippines requires candidates to be qualified nurses with work experience in their home country. But the nurses will still be required to pass Japan’s national examination — in Japanese — within three years of arrival. While they prepare for the exam, they will work as trainees. Another snag: Because of the global shortage of nurses, there is already strong demand for experienced Filipino nurses, particularly in the U.S., where language isn’t a problem for them and where qualified nurses are better paid.

What this indicates is that Japan recognizes it has a problem, knows what part of the solution must be, but isn’t really ready to bite the bullet and implement that solution. The movement of people is as important for globalization’s advance as the movement of resources and capital, but fears about terrorism, painful shifts from manufacturing to service economies in some developed states, and concerns about changing cultural norms are all thwarting that movement.