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Editorial: Changes needed in labor market framework to cope with population decline

A record low of 940,000 babies are estimated to have been born in Japan in 2017. The natural population decline calculated by deducting the number of births from the number of deaths surpassed 400,000.

Japan's population is expected to fall further. The year-on, year-off population decrease is estimated at 640,000 in 2025, 890,000 in 2040 and 940,000 in 2060. This is equivalent to a prefecture with a small population or a major city disappearing each year.

The decrease in the population of the working generations has already caused a serious labor shortfall. The workforce shortage is estimated to hit 4.16 million in 2020. It is essential to take countermeasures that would drastically change the current framework for the labor system.

Saving labor through the introduction of information technology (IT), the active use of the potential domestic workforce and the introduction of foreign workers have been cited as effective countermeasures against the labor shortage.

The use of IT to save clerical work has been growing in medicine and nursing care. Artificial intelligence (AI) that can instantly process massive amounts of information and robots that can perform heavy physical work are also expected to help ease the labor shortage. Still, there are many types of work that cannot be performed by AI or robots.

Senior citizens who are not working and full-time homemakers are an important source of potential labor. The so-called "productive age population" -- those aged between 15 and 64 -- which is used in various statistics, is estimated to fall by some 25 million by 2050 from the current level.

However, not many people in their teens and early 20s are working. Instead, there are more people aged 65 or older who are still in labor force and the population of this age group will keep rising. Moreover, Japanese people's expected healthy lifespan has been rising. Shouldn't the current employment system and customary employment practices under which the mandatory retirement age is set at 65 be reviewed?

There is a large population of healthy senior citizens who are keen to work and many highly educated women with special skills and expertise who are not employed due to child care or nursing care. If these people could work, it would contribute greatly to making up for the labor shortage. A growing number of companies are starting to allow their employees to telecommute. More measures should be implemented to have those who have difficulties commuting to their offices as a workforce.

Meanwhile, questions remain whether the employment of foreign workers should be promoted.

The number of foreigners working in Japan topped 1 million for the first time in 2016 to hit 1.08 million. Many of them are from Asian nations working in Japan as technical interns or those who have come to Japan as students for the purpose of getting a job. The number of technical interns came to about 211,000 and that of such students was about 209,000 in 2016, each up 25 percent from the previous year.

Students from Asian countries are often seen working at convenience stores in urban areas, giving the public the impression that Japanese society would not function without them.

The government-led Technical Intern Training Program for foreign trainees from developing and emerging nations was introduced in 1993 for the purpose of transferring skills to these countries. Many such trainees work at small-scale textile companies and in the agricultural and fisheries sectors.

Most of these trainees perform heavy and dangerous work that Japanese people tend to shy away from, and these trainees' workers' rights are not sufficiently protected. Furthermore, technical trainees are required to pay hefty commissions and deposits to brokers and are allowed to stay in Japan for up to three years in principle. Since they are permitted to work only at designated companies, they cannot change their jobs even if they are dissatisfied with low wages or poor working environments.

Under such circumstances, the foreign intern program has been bitterly criticized both in Japan and abroad.

The government has introduced new law to improve the intern program: the period of training could be extended from three to five years and measures have been implemented to ban brokers from demanding deposits or penalties for breaching their contracts from the trainees. Last year, the government set up the Organization for Technical Intern Training to strictly examine companies' training programs.

Still, the government has stuck to its basic position to use these trainees as cheap labor without allowing them to settle down in Japan.

Concerns persist that if a large number of people who have different lifestyles, religions and cultural backgrounds were to enter and settle in Japan, it could cause friction within Japanese society. If the government were to hastily change its labor policy to make up for the labor shortage, it would cause disorder.

However, the current foreign intern program and a system to allow foreign students to learn in Japan are far removed from their original purposes. Even though these trainees and students are important members of the workforce that can help ease the labor shortage, Japan is virtually using them as cheap labor and then throwing them out, taking advantage of loopholes in the system.

At the very least, the rules on the minimum wage and working hours should apply to technical trainees.

In recent years, wages in Shanghai and other major cities outside Japan are becoming higher than those in Japan. A growing number of workers from Myanmar and Vietnam are working in South Korea and Thailand. If the current situation were left unaddressed, foreigners willing to work in Japan could disappear.

To prevent the ongoing population decline from causing Japan to lose its vitality, it is necessary to change the traditional concept of labor practices. Japan should pursue a society where a wide diversity of human resources, including elderly people, women and foreigners, can actively engage in workforce.

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