Tokyo drift
In recent years, Japan has increasingly relied on external manpower to make up for labor shortages, with the country’s working age population having steeply declined since 1995. However, that trend escalated to new heights in 2023, and Japan’s Labor Ministry reported on Friday that the number of foreign workers surpassed 2 million for the first time ever — roughly tripling over the past decade and up 12% on last year.
Japan has issued more international visas across all qualification levels, from engineers and researchers to factory hands and caregivers, with employers using wage hikes and improved stability to draw in new talent — although the report outlined that it was “specialized skilled workers” seeing the biggest increase, soaring more than 75% to 139k.
Coming of age
Japan faces a similar, although arguably more acute, set of economic challenges to China due to its top-heavy workforce. One study recently predicted that the country might face a shortage of more than 11 million workers by 2040 due to death rates surging and birth rates hitting all-time lows last year. In 1993, nearly 32% of Japan’s population was 24 or younger — today, it’s estimated at less than 21%.
The news comes as Japanese authorities look to reinvigorate the economy after the “lost decades” — a post-1990 period that’s been marked by very little growth, stubbornly low inflation, and few productivity gains. But, more recently, there are green shoots of optimism and change: wages are rising faster than at any time in the last 3 decades, deflationary risks seem to be abating, and CEOs in the Nikkei stock index are getting younger as the country begins to gently move away from its traditional age-based hierarchies and lifetime employment models.
