Foreigners could help counter labour shortage in construction and agriculture.
Japan will launch a new resident status for foreign workers by April 2019 that has a lower language and other skills requirements to help solve labour shortages, according to the draft of the 2018 Basic Policy on Economic and Fiscal Management and Reform.
Citing reports, JP Morgan senior economist Masamichi Adachi said that labour shortages are high in construction, agriculture, nursing, lodging, and ship building. The secular decline of the labour force should also be considered, he noted.
"We believe that Japan needs to overcome the demographic challenge by combination of higher productivity and labour participation by Japanese, especially women and seniors, and more foreign workers,” Adachi said.
Due to the upcoming status offer, 500,000 foreign residents are expected to enter Japan by 2025 which is a 40% jump from 1.3 million resident foreigners in October 2017.
According to Prime Minister Shinzo Abe, guest workers are not supposed to come with families which means it is not a change in Japan’s immigration policy. Furthermore, Adachi believes that detailed requirements and procedures may actually lower the expected new foreign workers.
“Nevertheless, it is notable that the Japanese government has taken the step to officially accept low-skilled foreign workers for the first time,” Adachi commented.
“Many current foreign workers who are effectively low-skilled are students who can work part-time or as trainees who are supposed to acquire skills that would be useful in their own countries,” the economist added.
Despite the predicted increase in foreign workers due to the new resident status, Adachi believes that the new workers will still not be enough “to fully offset the shrinkage of the labour force”. In 2017, the working-age population (15-64) dipped 0.77% by 590,000 workers.
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