Japanese Imigration: A Cautionary Tale

Japan has one of the strictest immigration policies in the world and has historically been closed off to outsiders. It has a foreign population of less than 2% - six times smaller than the percentage of the U.S.

But what are the effects of keeping foreigners out?

Japan is facing an alarming labor shortage, says Robert Guest, the business editor of The Economist and author of "Borderless Economics."

Japan’s current population is around a 127 million. It’s on pace to be just 90 million by 2050, a drop-off of almost one-third. The nation is also aging. Almost one in four people are 65 or older – making Japan the oldest country on earth.

Guest says there’s a solution to the labor shortage: open the borders and invite more immigrants.

But that idea has hurdles.

“They don't have the idea that you can become Japanese,” says Guest. “And they don't have the idea that you can solve some of the country's chronic labor problems by importing foreign hands.”

In its health care sector, for example, Japan is estimated to be short almost 900,000 workers 2025. It started to invite foreign nurses, and since 2008 almost 600 have come to Japan.

But only 66 have passed Japan’s notoriously difficult nursing proficiency exam, which requires an expertise in written Japanese.

Japan’s health ministry has made the test easier, adding some English translations, but critics say it’s still unreasonable.

“It should be good enough that they are able to communicate verbally with people and that they are able to read the words they need to know for the tools of their trade,” says Guest. “It worked perfectly well in other countries.”

And it’s not just foreign workers who might run into obstacles. In some cases, it’s immigrants who have been living in Japan for decades.

In 1990, facing a labor shortage, Japan gave ethnic Japanese from South America long-term residence status, filling gaps in its workforce.

Japanese-Brazilians filled manufacturing jobs and became the third largest minority in Japan.

But in 2009, with unemployment running high, Japan actually offered money to them to leave the country – $3,000 for each worker to cover travel expenses.

And the flight was essentially a one-way ticket – anyone who took the offer couldn’t come back to Japan with the residence status they once had.

The government says it was only trying to help unemployed Japanese-Brazilians. They’ve stopped offering the deal and are reconsidering the residence status of those who took the money.

So if Japan won’t let in immigrants, what is it doing about its labor shortage?

It’s encouraging families to have more children, giving them $1650 a month for each child. But that hasn’t been enough to inspire a growth spurt.

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I really need to hurry up and get my nursing degree...