Demographic Doldrums

“TIME IS RUNNING OUT to procreate,” Japanese Prime Minister Fumio Kishida told a press conference earlier this year. But his exhortations seem to have left most Japanese unmoved, as have the attempts of various local governments to make matchmaking the business of policy. In the northeast Miyagi prefecture, for example, residents can find life partners via a government-sponsored, Artificial Intelligence-driven matchmaking service. While in the south, Miyazaki has opted for old-fashioned, encouraging putative couples to exchange handwritten letters. Moreover, Japan’s newly launched Children and Families Agency is in the process of deploying “marriage support concierges” in each of the archipelago’s 47 prefectures.

And yet, the nation remains in the demographic doldrums, caught between the pincers of a declining birth rate and an ageing population. Government data released in July showed not only that the number of Japanese citizens had shrunk by 800,523 over the last year (marking the 14th consecutive year of contraction), but that for the first time, every prefecture across the country saw a population decrease.

The shrinking labour force has meant that there are fewer working-age people to fund the pensions and healthcare needs of Japan’s growing cohort of the elderly. According to a new study by the independent think tank, Recruit Works Institute, the nation may face a shortage of more than 11 million workers by 2040.

This trend poses a conundrum that the policy czars in Tokyo have been unsuccessfully grappling with for decades. The country has one of the highest life expectancies in the world. In 2020, nearly one in 1,500 people in Japan was 100 years old or more. In the meantime, the fertility rate is currently at 1.3, well below the 2.1 required to maintain a stable population in the absence of immigration.

But the “I” word remains an anathema in notoriously foreigner-shy Japan. During the years I lived in Tokyo, between 2016-2020, many of the Japanese I spoke to clung to the hope that more women in the labour force, supported by more robots, would be sufficient to defray the need for more immigrants as a solution to the country’s labour crunch.

The government had however begun to reluctantly consider increased immigration as an inevitability. In 2018, Tokyo approved a policy change that created new visa categories to allow an estimated 340,000 foreign workers to take high-skilled and low-wage jobs. And in a major shift in 2021, the Japanese government said it was considering allowing foreigners in certain skilled jobs to stay on indefinitely.

But the Covid-19 pandemic put a spanner in these plans, with the country shutting its borders to foreign nationals and imposing lockdowns across many prefectures. Nonetheless, the latest data shows that the number of overseas-born residents in Japan is at an all-time high. At almost 3 million, it’s a 50 per cent increase over the last decade. However, even now, foreigners only account for just over 2 per cent of the total population. By way of comparison, the equivalent is 13.6 per cent in the US.

A report last year by a Tokyo-based research organisation, the Value Management Institute, found that Japan will need about four times as many foreign workers over 2020 levels by 2040 in order to achieve its economic goals. But it warned that to do so the archipelago had to create a conducive environment that was more accepting of foreigners.

The problem is that many Japanese remain xenophobic. In the popular imagination, the idea of immigrants conjures up dystopic images of increasing crime, social friction and overburdened public services. Racism permeates Japanese society in both lazy, careless ways and in more problematic, deep-seated ones. The former included the infamous “gaijin (foreigner)” seat in trains—the seat next to a foreigner that remains stubbornly empty even on a crowded train, with some Japanese preferring to stand rather than sit next to a gaijin.

In a survey carried out by Japan’s Justice Ministry in 2017, nearly a third of foreign residents said that they had experienced derogatory remarks because of their racial background, while about 40 per cent had suffered housing discrimination. Among the 4,252 foreigners canvassed, the majority identified themselves as Chinese and Koreans. Over 40 per cent had lived in Japan for more than a decade.

One in four jobseekers said they was denied employment because of being foreign, and one in five believed they earned less than their Japanese counterparts for similar work. Putting paid to the notion that such discrimination was related to language, 95 per cent of foreigners whose job applications were rejected, and over 90 per cent of those whose housing applications were denied, were able to speak Japanese “conversationally, professionally or fluently.”

And yet, I found that much of society seemed to be in denial that anything like racism even existed in Japan. There was a widespread belief that racism was about discrimination by white people against those of colour. As a non-white country, Japan was therefore exempt from the need to redress it. The notion that Japan was a uniquely homogenous, racially pure society with few ‘outsiders’ was deep-seated, reinforcing the ostensible irrelevance of “racism” to public policy or discussion.

THERE ARE ALSO a number of administrative challenges that make it hard for immigrants to adjust easily to life in Japan. For example, IT is a sector where Japan’s shortfall in talent is acute. The country already suffers a 200,000 IT engineer-lacuna, a gap that’s expected to grow up to 800,000 by 2030.

India is a fertile hunting ground for new talent. I had met with Yohei Shibasaki, CEO of Fourth Valley Concierge Corp, a headhunting firm headquartered in Tokyo, who told me he regularly recruited from about 30 Indian universities, including several IITs. The Japanese government had even introduced a special “engineer visa” which simplified the process of obtaining legal paperwork. But he’d added that the fact was that most Japanese firms could not cope with English-speaking hires, which constrained their ability to recruit Indians.

Harsh Obrai, the director of the India IT Forum in Tokyo, a group that works on issues faced by Indian IT professionals in Japan, had explained that living as a foreigner in the country could be onerous. From having to file tax returns in Japanese, to an inheritance tax that applies to global assets even for people who have only worked in the country for a few years, Japan was hard to navigate for expats. Securing housing without a guarantor who was legally required to pay the rent were a tenant to fall behind was another obstacle.

IN THE MEANTIME, ordinary Japanese are beginning to feel the labour crunch in ways that might just help change attitudes to immigration more than abstract notions of pensions down the line: ice-cream.

A small, but significant pleasure—that of enjoying an ice-cream and coffee on the Shinkansen (bullet train) while watching Mount Fuji pass by, will now only live on as nostalgia in people’s memory. Central Japan Railway has announced that due to a labour crunch, it will soon remove snack carts from its Shinkansen trains and install more vending machines on platforms instead.

ageingdeclining birth ratedemographyimmigrantsJapanpopulationsocial crisis