The Pandemic Depression
The Global Economy Will Never Be the Same
As the only advanced industrial democracy that has closed its borders to unskilled migrant labor since the end of World War II, Japan has long been viewed as hostile to immigration. Although the number of foreign nationals in Japan has grown at a rapid pace in recent years—from 850,000 in 1985 to almost 2.6 million in 2017—foreign residents still make up less than two percent of the total population, compared with between eight and 25 percent in western European countries. And only one-fifth of Japan’s foreign workers hold visas explicitly intended for labor immigration, which is restricted to the highly skilled.
Japan’s aging population, however, is creating a demand for foreign labor. Japan’s population peaked at 127.8 million in 2004 and has fallen by over 1.5 million since then, and its working-age population has dropped by over ten million since 1997. Nationwide, the ratio of job openings to applicants now stands at around 1.6, the highest it has been since the height of the so-called economic miracle over four decades ago. Workers in construction and mining, caretaking, food service, hospitality, and retail are in particularly short supply. In July 2018, the Japan Chamber of Commerce and Industry, which represents the country’s small- and medium-sized businesses, reported that around 65 percent of members had difficulty meeting labor requirements despite wage increases.
In the face of these shortages, the administration of Japanese Prime Minister Shinzo Abe has shifted toward a greater openness to foreign workers, although the word “immigration” remains taboo. Since 2015, the Ministry of Justice has dramatically expanded quotas and stay durations for construction workers in preparation for the 2020 Olympics in Tokyo. The 2016 Japan Revitalization Strategy, an annual policy report published by the Cabinet Office of the Prime Minister, repeatedly mentions the need for “foreign talent” (gaikokujin jinzai), a term that includes unskilled labor, as a critical tool for economic recovery. And in May of this year, the administration announced its intention to admit up to 500,000 additional workers in agriculture, construction, lodging, nursing, and shipbuilding through 2025.
These changes have led some to argue that Japan, by opening the door to foreign labor at a time when other advanced industrial democracies are shifting toward more restrictive immigration policies, may finally be on its way to becoming a country of immigration. Yet this conclusion is premature. Although Japan is taking steps to fill labor shortages and de-ethnicize its migrant labor schemes, it is too soon to tell whether these signal a true liberalization of immigration policy rather than a tinkering with an illiberal status quo.
Official discourse in Japan has, until recently, emphasized the virtues of a homogeneous national community. Public debates over immigration have traditionally focused on the dangers that diversity poses to social stability and national security. In the 1960s, Japan, like other industrialized countries, faced serious labor shortages. Yet instead of importing foreign labor as their North American and European counterparts did, Japanese officials and corporations opted instead to automate, shift production abroad, and tap into alternative sources of domestic labor such as women, students, the elderly, and rural migrants. From the mid-1980s, Japan confronted a second labor shortage. This time, internal sources of domestic labor were depleted and rising urban land prices were forcing workers to leave the cities.
In response to this labor shortage, in 1990 the Japanese government amended the Immigration Control and Refugee Recognition Act, opening two legal loopholes for employers to import cheap labor without violating official closed-door policies, which admitted only a small number of skilled professionals, often from the West. The first was the teijusha (long-term resident) visa, which was available only to second- and third-generation Nikkeijin, the descendants of ethnic Japanese who had emigrated from Japan in the early twentieth century, mostly to Brazil, Peru, and the United States. The second loophole established visa categories for the various stages of the Technical Intern Training Program (TITP), allowing foreign “trainees,” usually from other Asian countries, to train and work in Japan for up to three years. The teijusha visa, which held tremendous appeal for the Latin American Nikkeijin, was renewable, allowing a recipient to live in Japan long enough to naturalize or become a permanent resident. Furthermore, it offered Nikkeijin the ability to move freely across the country and change jobs. On the other hand, the trainees and interns of the TITP were tied to the employer they were assigned to and were often threatened with deportation if they attempted to find alternative arrangements.
The extreme differences between these two programs reflected Japanese politicians’ own prejudice toward foreigners, which they assumed their constituents shared. Ethnically distinct workers from Asian countries were seen to be threateningly foreign, and Japanese politicians feared that they would seek to establish themselves in Japan just as Turkish and Yugoslav guest workers had found ways to permanently settle in Germany during the postwar period. On the other hand, they believed that Nikkeijin workers, who were at least partly Japanese by blood, would adapt quickly to life in Japan.
Yet the teijusha and TITP programs had unintended consequences. Despite perennial complaints regarding labor abuses, the TITP program had been effective in directing workers specifically toward struggling small- to medium-sized businesses, which were often unattractive workplaces for native Japanese, particularly if located in a rural area. The government has rapidly increased the scale of the program in recent years, bringing in almost 20 percent more workers last year than in 2016. On the other hand, Japanese policymakers discovered that most Nikkeijin did not naturally assimilate—they continued to suffer from low rates of Japanese literacy and faced discrimination in the workplace. When many Nikkeijin lost their jobs during the first major recession of the early years of the twenty-first century, the government offered to pay for one-way tickets and relocation expenses for those who promised to return to Latin America and not come back. By essentially walking back the teijusha program while expanding programs such as the TITP, Japan has significantly de-ethnicized its immigration preferences over the last decade.
Unlike most Western democracies, however, it has done so without significantly liberalizing its immigration and integration policies. Although deepening labor shortages have required increased quotas for foreign workers, most of the restrictions on their rights remain unchanged. The new plan to accept half a million additional workers, for instance, introduces the possibility of allowing foreign workers to bring their families to Japan, but only after they have worked for at least five years. Likewise, although the new plan will allow some workers—those who perform well and learn Japanese—to work in Japan for up to ten years, it also periodically compels them to return to their home countries in order to prevent them from becoming eligible for permanent residency.
Interestingly, the Japanese government has also moved to reengage with co-ethnics: on July 1, a new pathway was opened allowing fourth-generation Nikkeijin to seek employment in Japan. In a clear reaction to the failures of previous policies, fourth-generation Nikkeijin will be restricted to a maximum of five years in Japan under a “special activities” visa. Although they will be able to seek employment freely, their visas require annual renewals based on factors such as improvement in Japanese language ability, engagement with Japanese culture and/or the local community, and continued permission from a Japanese sponsor, who is responsible for regular supervision of the participant’s life. Despite the fact that this visa category was specifically created for a group of co-ethnics, its restrictions and terms are closer to those of guest worker programs than those of the original teijusha visa.
The sum of these changes has led to speculation that Japan is finally moving away from its restrictive immigration policies. In a recent paper, the migration scholars James F. Hollifield and Michael Orlando Sharpe labeled Japan an “emerging migration state” based on its growing capacity to manage migration as part of both its domestic and its international policies. Yet this growing capacity is coupled with a continued reluctance to commit to a clear road map for the future. In the meantime, Japan is attempting to tread the middle course, introducing temporary and ad hoc programs to cycle through foreign laborers while denying them a path to residency.
What would a comprehensive road map look like? One likely model lies just next door, in South Korea. Seoul abolished its analogue to the TITP at the end of 2006, replacing it with the Employment Permit System (EPS), explicitly designed for the temporary employment of foreign workers. By officially recognizing them as workers and not as trainees and interns, the EPS has granted guest workers more equal employee rights, access to benefits, and treatment under labor laws. The EPS has also made naturalization more common among marriage migrants and highly skilled workers who can reside in South Korea indefinitely. Japan could move in this direction through the stricter application of labor law in favor of TITP participants, who have often been denied legal protection. Closing the gap between how foreign and native workers are paid—and treated—would contribute to establishing a more standard guest worker system.
It is also possible that Japan will further entrench an illiberal system that treats foreign migrants as a permanently disenfranchised underclass. Compared with Germany and other western European states, which eventually amended their guest worker programs to allow for family reunification and a path to citizenship, Japan has less competitive elections, a more insulated bureaucracy, and little in the way of judicial activism. Even civil society actors that have won victories for certain immigrant and minority groups have not pushed to convert them into universal norms. On its current path, Japan may go the way of the Gulf states, in which both high- and low-skilled foreign workers remain excluded from the national community and low-skilled workers are denied access to legal recourse in the event of labor disputes or rights abuses. Doing so, however, could endanger Japan’s reputation as one of the world’s liberal democracies.