Oizumi Town is one of the leading industry towns in Gunma Prefecture in terms of indicators such as value of manufactured goods shipped, and its economy would not be viable without foreign labor. From the perspective of welfare, foreign caregivers are also essential to the town. Foreign residents account for more than 20% of the population. The foreign residents who live in the town are not regarded merely as a labor force, but rather as residents who are provided with services on an equitable basis.

A foreign community has been formed, making it possible to live without speaking Japanese, but there are also cases in which non-Japanese speakers are dismissed from their jobs because they cannot communicate. More than 70% of the foreign residents in the town are permanent or long-term residents, and those who came to Japan in the 1990s are becoming elderly; some of these residents have not contributed to the pension system and may become welfare recipients in the future. In addition, we have elementary school grades where 40% or more of the children are foreign nationals; Oizumi Town has established Japanese language classes in all public elementary and junior high schools. If such measures are left to local governments, it may be difficult for some to respond depending on their size and finances. The national government should take the lead in this area.

The role of local governments is, first, to listen directly to the concerns of foreign residents and promptly respond to them, thereby allowing mutual bridging of the divide and the building of relationships of trust. I have direct dialogues not only with key figures among our foreign residents, but also with the children of foreign residents; the children spread information such as garbage disposal rules that I want their parents and the local community to be aware of. In addition, we have made medical forms and legal consultations available in multiple languages, and this has been so well received that the initiative is being rolled out horizontally to neighboring municipalities.

Second, it is important to foster trust between foreign and Japanese residents, and to eliminate bullying and discrimination based on nationality. When a crime is committed by a foreigner, there is concern that all people from that country will be considered criminals, or that Japanese parents will tell their children not to associate with foreign children. While many foreign residents seek to interact with Japanese residents, only a mere 10% of Japanese residents say they want to become more friendly with foreign residents. In this respect, there is a difference in temperature between foreign and Japanese residents.

Doing away with stereotypes of foreigners among Japanese residents is a step toward the realization of a society of coexistence. Oizumi Town is working to eliminate nationality clauses in the hiring of employees. Under the current system, children of foreign nationals who are born and raised in Japan are not allowed to become town hall employees even if they feel that they would like to be of service to Japan after having been helped by our town. Although there is a great deal of criticism and opposition, we believe that making this possible will be recognized as a pioneering effort in the future.

Japan’s Technical Intern Training Program, established 30 years ago for the purpose of training human resources for developing countries, has long been used as a means of securing a labor force by accepting foreign workers on a rotational basis, without allowing them to bring their families with them. It goes without saying that the discrepancy between the purpose of this system and the actual situation must be corrected, and foreign workers must be accepted as “people” rather than as a “labor force.” It is understandable that the nation wishes to accept “favorable foreigners” as convenient, but at the same time, foreigners also have the right and freedom to choose the country and place where they work, and we should discuss policies on this basis.

First, the system of acceptance of foreign workers must respect human dignity and rights. The Specified Skilled Worker Program, which was established in 2019 to alleviate labor shortages, has two categories of status of residence. Type 1, like the Technical Intern Training Program, has an upper limit to the total period of stay (five years) and does not allow family members to accompany the worker. The same is true of the 3-year training and employment system that will replace the Technical Intern Training Program. The design of the system, which in principle prevents foreign workers from living with their families for a period of 8 years, can only be viewed as displaying a disregard for those workers’ quality of life.

Second, is the freedom of transfer to an alternative receiving organization ensured in practice? Restrictions on transfer are a major factor in human rights violations under the Technical Intern Training Program; under the training and employment system, transfer for personal reasons is now permitted. However, strict transfer requirements are imposed: the worker must have worked for one to two years for the same receiving organization and pass Japanese language and skills tests. Even if the requirements are met, it is difficult for a foreign worker to find a new receiving organization without appropriate transfer support. Unless transfer is guaranteed in practice, the new system will not be able to eradicate human rights violations.

Third, we should discuss the immigration policy based on “the Life Cycle”. With the exception of technical intern trainees, the path to permanent residence and Japanese citizenship is open to the majority of foreigners, and Japan is already an “immigrant society.” Despite this, the government still maintains the stance that “the utilization of foreign human resources is not an immigration policy”. As a result, although support for entry has been enhanced, for example in the multilingualization of administrative services, discussions on rights necessary for living-together, such as stabilization of legal status and the right to vote, have not progressed.

Workplaces and regions that are attractive to foreigners are also desirable for the Japanese themselves. Although the rights of foreigners and the national interest are often discussed as trade-offs, they can be made compatible. Achieving this will not only make Japan a country of choice for foreign workers, but will also create a better society for the Japanese.

Seeking to increase the competitiveness of Japanese companies, the Japanese government is actively promoting the acceptance of highly-skilled foreign human resources. For some time now, Japan has selectively accepted highly-skilled human resources in order to head off the possibility of foreign workers taking the jobs of Japanese workers en masse. However, the hiring and management of these foreign human resources has not been a success, and the fact that they tend to leave the workforce after a short period of time is viewed as a problem.

Traditional large Japanese companies tend to promote the development of human resources through job rotation. foreign personnel who join a company are therefore not always assigned jobs that allow them to utilize their advanced skills. While they are allowed to stay in Japan because they are highly skilled, there is a contradiction with Japanese employment practices, which often operate on a step-by-step basis, starting at the middle level. This creates a difficult situation for both HR personnel and the foreign nationals who work for their companies. Companies find it difficult to offer foreign personnel special treatment based on considerations of fairness. On the other hand, while foreign personnel feel that the experience of working for a large Japanese company is attractive in terms of career advancement, their current jobs do not open out to the future, and they find it difficult to visualize long-term career prospects.

However, it is also problematic to view Japanese employment practices as “bad” in and of themselves. The Japanese employment system is in some respects attractive to foreign human resources in the early stages of their careers. Short-term turnover of highly-skilled personnel often occurs because the intentions of the foreign worker in choosing a Japanese company and the intentions of the company in hiring the foreign worker are not communicated to each other. In order to retain foreign human resources, it will be necessary to deepen mutual understanding, including how communication is handled.

In addition, living conditions, such as residential environment and family formation, affect the career development of foreign workers as much as employment conditions. Spouses are allowed to accompany highly-skilled human resources to Japan. To take an example, when two foreign nationals marry, the existence or absence of support measures influences their decision to stay in Japan. Companies are unable to influence these areas of support for daily life. On the other hand, hiring foreign students is also an effective strategy, but the logic of the system makes it difficult for these students to be regarded as highly-skilled human resources, and as a result, support in the area of employment is less available to them.

Highly-skilled human resources choose companies where they can utilize their skills; such a company does not have to be a Japanese company. In addition to the skill development and lifestyle support offered by companies, policies to offer access to information on the Japanese labor market, provide support for changing jobs in Japan, and raise the standard of living for holders of “Gijinkoku” visa status (Note) are essential to enabling foreign human resources to continue to thrive in Japan without seeking alternative employment overseas.

(Note): The visa status “Engineer/Specialist in Humanities/International Services.” This is the most common status of residence for white-collar workers in Japan, which permits foreign workers to reside in Japan in order to perform work in which they are recognized as possessing a specific level of expertise.

As Japan’s labor force shrinks, a major shift is underway in the country’s immigration policies. New policies allow more workers from overseas, but Japan should be wary of fixating on how many millions will be needed to compensate for aging, or what migration targets should be met. Ultimately the measure of success will not be whether inflows can maintain the current working age population, but how well policymakers can identify labor demands that can't be met domestically, help match them with suitably skilled workers, and ensure those workers successfully integrate.

Japan’s Specified Skilled Worker (SSW) program, introduced in 2019 as the country's first large-scale official lower-skilled migration pathway, stands out among OECD countries for its emphasis on continuous skills development. This strategy ensures workers meet evolving employer needs while also promoting skill transfers that can benefit workers' home countries. Japan’s highly skilled migration system is open, with no admission ceiling and – since 2012 - preferential treatment for very qualified individuals. However, Japan struggles in the global competition to attract mid-career professionals due to low starting salaries and slow salary progression offered by Japanese companies. What helps Japan, on the other hand, is the high rate of foreign graduates of Japanese higher education institutions who chose to remain and start their careers in the country.

Japan still lags in modernization of its immigration system, collecting insufficient data on immigrant labor market outcomes and still struggling to pair employer needs with the skills of foreign workers. The OECD urged Japan to develop a comprehensive “Japan Jobs” portal connecting those looking to work in Japan with employers, streamline the job matching process and improve data collection.

Japan’s biggest immigration challenges however, stem from a worrisome lack of planning for the downstream consequences of immigration, especially of families of workers. For example, a real novelty is that SSW(ii) workers will be able to bring their families to Japan. At present, their spouses are not  granted full, automatic labor market access, which risks leaving families with insufficient income. Labor market integration programmes will be needed and access should be granted as soon as possible. Another long-term challenge is education for non-citizen children, who, unlike in other OECD countries, aren't required to attend school. Since this has been an issue in the past - the negative outcomes suffered by children of returning “Nikkeijin,” ethnic Japanese emigrees in the 1990s - it’s essential that the education system make more effort to ensure full enrollment of non-citizen children and take appropriate measures to ensure their success.

Japan faces similar challenges to other OECD countries with rapid increases in labor migration. The reforms of the past decade mean the question is no longer about whether to open, but how to prepare for and manage the implications of migration. More people will certainly come to Japan - recent concern about the weak yen hindering recruitment to Japan ignores just how large the pool of potential migrants is. Despite some issues to address, Japan has reliable migration channels in place. Japanese policymakers must redouble their efforts to detail and communicate immigration policy goals and manage public expectations. Public support is essential for migration to be a successful pillar in a new growth strategy.

Working with a sense of urgency, we can push forward the evolution of Japan's homogeneous society into a diverse society, leading to economic and social growth through the promotion of reform of the industrial structure and a shift in values. Acceptance of foreign workers is an opportunity to advance this process, and should be actively pursued.

Japanese society has long respected the virtue of “cooperation,” but the challenge for the future is how to create a culture and awareness that respects “differences of opinion” and “individuality.” The low self-esteem of the younger generation of Japanese is also a concern, and while diversity, equity, and inclusion (DEI) exists as a concept, it has not yet taken root in Japanese society. It is possible that, with the stalling of their traffic with the rest of the world due to the pandemic and the disruption of the international order, the Japanese may also, psychologically, be reverting to a state of homogeneity. It will be important to increase opportunities to experience diversity and different cultures by attracting more foreigners to Japan and expanding the range of possibilities for Japanese to travel, work and study overseas.

Companies need to move ahead with foreign investment and at the same time actively accept investment from abroad. The entry of not only funds but also human resources and technology into Japan will help to spread diverse values. Japan, which has few resources, needs highly specialized human resources; the fact that while approximately 60% of Ph.D. holders in the U.S. are active in industry, Japan is not actively utilizing its own, with a figure of only about 30% represents an issue for the nation. The overwhelming majority of foreign human resources are highly specialized, possessing comprehensive knowledge and a high level of metacognition, and accepting them would broaden the scope of Japan's highly specialized human resources and generate innovation.

With the advance of globalization, we no longer live in an era in which we draw a line between foreigners and Japanese when it comes to human resources. Japanese society tries to provide ease of work and comfort to foreign workers, but foreign workers are looking for job satisfaction and a purpose in life. It is important to clearly offer foreign workers a sense of expectation and to set them high goals. In terms of systems, the remuneration system of Japanese companies is membership-based rather than job-based, which is also an obstacle to accepting foreign workers. There is no need to force foreign workers to adapt to the membership-based system.

It will also be a good idea to increase opportunities for interaction for foreign employees of companies, for example through local volunteer activities. Human beings fundamentally seek their own growth. The growth of diverse people leads to the growth of companies, which leads to the growth of the nation, which in turn creates a virtuous cycle that improves the lives of the people. If Japan can create such an environment, it will become a place where any and all human resources will be able to play an active role.

When I say that Japan’s declining population, low birthrate and aging society is a profound problem for the Japanese economy, the majority of foreign academics and researchers reply that if this is the case, Japan should be more proactive in thinking about accepting foreign human resources and formulating immigration policies. By contrast, in Japan itself there is a significant amount of negative opinion regarding immigration policies, with concerns, for example, over the cultural friction that may arise from such policies. Even if considerations of immigration are not involved, there are various opinions for and against the acceptance of foreign human resources, and as a result the simple argument that Japan’s working population will decline, and we should therefore increase the number of foreign workers as replacements, will not stand.

At the same time, the reality is that foreign nationals are already active in many fields in Japan, and there is no doubt that the question of how Japanese society should respond to the acceptance of foreign human resources, including issues related to the education of their children, is one that should be seriously considered. With the yen continuing to depreciate and wage increases for Japan as a whole rather stalled, some say that from now on we need to consider the issues from the standpoint of “how can we actually attract foreign human resources?”

Under these circumstances, it is not a simple matter of right or wrong, with regard to foreign workers and immigrants; a more realistic and solid understanding and analysis of the current status is needed. In addition, while we may speak collectively of “foreign human resources,” the actual situation differs greatly depending on circumstances. Based on this perspective, in this issue of My Vision, we have sought opinions from experts who are familiar with various aspects of the actual circumstances surrounding foreign workers in Japan.

Toshiaki Murayama is the mayor of Oizumi Town in Gunma Prefecture, a town in which foreign residents make up more than 20% of the population. The situation on the ground in Oizumi Town therefore represents valuable information, and Mr. Murayama’s recommendations are persuasive. Here, the fact that more than 70% of the foreign residents are permanent or long-term residents, the reality of elementary schools where 40% or more of the students in some grades are foreign nationals, and the fact that some elderly foreign residents have not contributed to the pension system provide important information for thinking about the future. Mr. Murayama points out that the role of local governments here is to promptly address the problems of foreign residents, to build relationships of trust, to foster trust between foreign residents and Japanese residents, and to eliminate bullying and discrimination based on nationality.

Professor Eriko Suzuki of Kokushikan University's Faculty of Letters points out problems with the Technical Intern Training Program, which has in reality functioned as a means of securing labor, and discusses issues and possible directions, chiefly from the institutional perspective. Professor Suzuki points out that the Technical Intern Training Program, the Specified Skilled Worker Program (i), which was established to solve Japan’s labor shortage, and the training and employment system, which is to be established in place of the Technical Intern Training Program, are all designed in such a way that, in principle, workers cannot live with their families, and thus display a disregard for the quality of life of foreign workers. She also warns that the training and employment system will be unable to eradicate human rights violations unless the ability of trainees to transfer to alternative accepting organizations is guaranteed in practice. It is important to stress that foreign workers have the right and freedom to choose the country and place where they work, and that policies should be discussed on this basis.

On the other hand, Project Research Associate Kaoru Sonoda, of The University of Tokyo’s Institute of Social Science, focuses his attention on highly-skilled foreign human resources. Unlike the workers focused on by Professor Suzuki, Professor Sonoda tells us that highly-skilled workers are allowed to have their spouses accompany them. However, the existence or absence of support measures in aspects of their lives such as living environment and family formation will have a significant impact on their decision to stay in Japan. Professor Sonoda also argues that there are issues involved with Japanese employment practices, such as the fact that the intentions of companies that hire foreigners are not fully communicated to them, or that their current jobs do not lead to long-term career prospects. These are, in fact, issues that arise not only for foreign personnel but also for Japanese workers, and in this sense, we may say that Professor Sonoda’s observations indicate a need for further improvement of the Japanese labor market in general.

Jonathan Chaloff, a Senior Policy Analyst in the International Migration Division of the Organization for Economic Cooperation and Development (OECD), discusses the challenges facing Japan and the necessary measures to be taken from an outside perspective. He notes as problems that the collection of data concerning the foreign labor market is inadequate in Japan, and that it is difficult to match foreign workers’ skills with the requirements of companies. Related to the points noted by Professor Sonoda, Mr. Chaloff indicates limited access to the Japanese labor market for the spouses of foreign workers, in addition to the lack of educational obligations for the children of the foreign nationals, as issues to be addressed. In the latter respect, Japan differs from other OECD countries, and Mr. Chaloff stresses in particular the need for Japan’s education system to take measures to address this issue.

Akiyoshi Koji, Chairman of the Board of Asahi Group Holdings, Ltd., addresses the fundamental question of why Japan should accept foreign human resources. He tells us that “cooperation” has long been respected in Japan, but the challenge for the future will be how to create a culture and consciousness that respects “differences of opinion” and “individuality.” The key to this is how to achieve the evolution of a homogeneous society into a diverse one; the acceptance of foreign human resources will provide an opportunity to do this, and Mr. Koji advocates its active promotion. He also states that accepting highly specialized personnel will broaden the scope of Japan's highly specialized human resources and lead to innovation. Furthermore, he indicates that foreign workers are seeking job satisfaction and a purpose in life, and it is important to set high expectations and goals for them, a view shared by the five experts.