Japan’s Labor Migration Reforms: Breaking with the Past?

In 2019, Japan began to set aside the decades-old distinction in its migration regime between “un-/low-skilled” work and highly skilled professional employment, hoping to bring in as many as 350,000 medium-skilled foreign workers over five years to fill labor market gaps in a rapidly aging society. Nearly a year into implementation of this system, however, only a fraction of these workers has been hired, raising questions about the extent of reforms likely by a country that has long taken a guarded view of immigration.

The changes ushered in with legislation passed by Japan’s Diet in December 2018 make possible labor migration for two categories of medium-skilled workers in 14 labor-shortage sectors. One category is for temporary workers who can remain a maximum of five years; the second allows unlimited visa renewals and accompaniment by family members, inherently opening a path to permanent settlement.

The system is intended to flexibly adjust admissions in response to economic conditions, setting a maximum cap of 350,000 migrants over five years. There has been strong interest in this new employment pathway, particularly from workers in Vietnam, the Philippines, Cambodia, and Thailand. Yet while a projected 32,800 to 47,500 worker visas were expected to be granted in fiscal year 2019 (April 1, 2019 – March 31, 2020), just 1,621 foreign residents held this visa ten months into the fiscal year. This small number undoubtedly reflects a lag required to establish the organizational and procedural infrastructure.

This article focuses on two questions: Is this new system of work visas simply an effort to secure a workforce without making long-term settlement possible? And how does it improve on, mesh with, or replace the existing Technical Intern Training Program (TITP), which has met with strong criticism domestically and internationally for its susceptibility to abusive practices? As the article will show, the answers reveal how Japan’s politicians are threading the needle in introducing policy changes that respond to widespread business demand for scarce workers and societal pressures to care for the rapidly aging population without embracing immigration head-on. And while the 2018 legislation may open the door somewhat to a different understanding of migration and long-term settlement, it also risks perpetuating existing problems with respect to migrants’ rights and protections because of troubling continuities with the TITP trainee program.

A Quiet Openness to More Immigration

The Diet’s approval of the medium-skilled worker visa categories emerged in a broader context of massive labor demand and expanding options for foreigners to work in Japan, a country with a population of about 126 million people. Despite the 2008-09 global financial crisis and the triple disasters (earthquake, tsunami, and nuclear breach) experienced by northeastern Japan in 2011, the total noncitizen population increased by about 20 percent between 2007 and 2017, from about 2.1 million in 2007 to nearly 2.6 million in 2017. More striking is growth in specific categories of residence occurring during that period, including those associated with indefinite visa renewals and permanent residence:

• The number of foreigners with permanent residency increased by 70 percent (not taking into account the separate category of special permanent resident that covers colonial-era residents)
• About 124,000 applications for citizenship were approved—representing 22 percent of all naturalizations granted since 1952
• The number of foreign workers in professional or technical fields, who may renew these employment visas with no limit, increased by more than 50 percent
• The number of international students, who can work up to 28 hours per week, almost doubled. Of the 267,000 international students in Japan in 2017, almost 79,000 were studying in Japanese language schools.
• Temporary workers in the TITP program increased more modestly: from 231,000 in 2007 to approximately 245,000 in mid-2017.

Changing Policy Landscape

The expansion of visa programs and eased regulations have underlain this increased immigration. Among the changes, the government:

• Created a points system in 2012 for highly skilled professionals. The number of visas issued rose from an initial low of 845 at the end of 2013 to almost 13,000 as of June 2019.
• Set the goal of increasing international student enrollment to 300,000 by the end of this year, with the aim of creating a pool of part-time workers even as they are being trained to graduate as professionals who can contribute to an international workplace.
• Adopted a short-term emergency measure in 2014 designed to help meet labor demand for preparations for the 2020 Summer Olympics in Tokyo. Under this, TITP interns in construction and shipbuilding have been allowed to obtain visas for an additional two years under a separate visa designation.
• Enacted legislation in November 2016 overhauling administration of the TITP system and supervision of employers’ conduct. The law also provided for possible extension of one’s stay on the TITP from three to five years and added a new category of “care work” (nursing care) in residential-care facilities.
• Created a care work visa for foreign residents who become Certified Care Workers by graduating from recognized Japanese vocational training programs. This visa status allows recipients to bring in family members and in principle permits unlimited visa renewals and ultimately permanent residence and citizenship. In anticipation of this change, the enrollment of international students in Certified Care Worker training programs increased from 17 in 2014 to 1,142 four years later.

Additionally, the government has begun to take responsibility for the social and policy context encountered by foreign residents. The national government in 2019 began providing funding for services offered through Foreign Residents’ One-Stop Counseling Support Centers throughout the country. Previously, the costs of the support centers had been unevenly shouldered by local governments that recognized a need for such services for their foreign-born residents and had adequate resources to offer them. National grants are to be disbursed to all prefectures, all cities with populations over 500,000, and other cities with large foreign populations. The support centers provide migrants multilingual information and assistance in dealing with all aspects of social and tax policies as well as other regulations that affect them.

In short, the creation of the medium-skilled work visa categories fits within a mosaic of policies that are contributing to increased labor migration and establishing better integration supports for immigrants, permanent and temporary. Taken together, the above trends and policy changes reflect a spreading receptivity to migrants across skill levels. They further recognize that migrants are part of society and that many are settling, even though the government has not formulated a general policy that actively encourages immigration.

A New Focus on Medium-Skilled Employment Visas

Until now Japan has prioritized admissions for highly skilled and skilled occupations, but has imposed firm limits on the stays of low-skilled workers in the TITP. The expansion of opportunities for skilled workers in manual- and service-sector jobs departs from the rationale for the TITP as temporary training to contribute to the origin country, by recognizing that Japan wants these employees provided they meet a certain skill level. The new system provides for two new visa categories: Specified Skilled Worker 1 (SSW1) and Specified Skilled Worker 2 (SSW2). (See Table 2 for more details.)

The Temporary SSW1 Category

The SSW1 category is temporary and imposes a maximum length of stay, but it also builds on the TITP by allowing trainees to transition to this visa. It is limited currently to 14 occupational sectors (see Table 1).

The SSW1 program allows a maximum cumulative stay of five years, based on regular renewals of a shorter-term permit for this status. It does not allow a worker to bring family members, but grants workers the freedom to change employers. Eligibility is determined in one of two ways. Current work interns who are near completion of three years on the TITP are eligible to apply for the visa and are exempted from meeting test requirements. Those not in the trainee program must pass a sector-specific skills test and take a language exam to demonstrate they meet the language proficiency standard set for their particular sector. The Asahi Shimbun newspaper estimates that 50-60 percent of SSW1 workers will come from the trainee program. In effect, if a worker on the TITP completes a maximum of five years in that status and then shifts to the SSW1, this would allow a total temporary stay of ten years.

Worker eligibility is only the first part. Not only must there be an employer ready to hire the worker, the employer must demonstrate that it has secured a registered “support organization” responsible for ensuring needed supports for the worker, including Japanese language training, assistance with housing, and other essentials for maintaining life in Japan.

The Less Temporary SSW2 Category

For SSW2 status, which requires a greater skill level, so far only two occupational sectors have been approved: construction and shipbuilding-related industries. These sectors received emergency approval to extend the stay of TITP workers to five years even before the program was overhauled, so the SSW2 should enable continued employment of their workers, with exams likely in 2021.

The SSW2 will allow unlimited visa renewals as will permit the recipient to bring his or her spouse and children, but not parents or other relatives. In theory—and based on quite a bit of discussion in Diet committees—SSW2 visa holders should be eligible to obtain permanent residency and even citizenship if they meet the requirements.

A Contentious Birth for the New Worker Visa Categories

There has been little disagreement over the need to expand labor migration options, as resistance to relying on foreign labor to meet demand has weakened in the past decade. But there has been considerable dissatisfaction, including from the general public, with how the new medium-skilled visa system was created, due partly to a rushed legislative process, but also to specific conditions and the questionable adequacy of required supervision and support systems. Disagreement over policy substance has centered on: 1) problems inherent in building a new system that is linked to the flawed TITP system, as is the case for the SSW1 category; and 2) adequate protection of the rights and integration supports for these foreign workers, with some advocates wanting SSW1 workers to be able to bring family members.

Two major business organizations were strong supporters of the legislation and its rapid passage. The Japan Business Federation (Keidanren) was firmly behind the government’s proposal, which closely matched a plan it issued in 2016. The Japan Chambers of Commerce and Industry, which represents small firms and therefore businesses seriously affected by hiring difficulties, had already been seeking a similar visa arrangement.

Others, including the influential Yomiuri Shimbun newspaper, situated the legislation in terms of the strong need for labor, while calling for careful implementation. Its editorial page voiced the imperative that foreign workers be dispersed throughout the country to avoid regional inequalities and that adequate social policy and integration services be available in those regions. At root lay the fear that rural areas in great need of workers would be unable to recruit and retain them.

Dissatisfaction

In contrast, discontent with the new system—coming from some business, trade union, civil-rights, and immigrant organizations—has centered especially on its linkages to the TITP and implications for potential rights violations. The Japan Association of Corporate Executives (Keizai Dōyūkai), among others has called for abolition of the trainee program. The group

favors keeping the TITP and SSW systems entirely independent, and insists on rigorous enforcement of rights and protections for SSW workers to avoid the chronic monitoring failures associated with the trainee program. Employers’ failure to live up to their contracts and inflicting of physical and emotional abuses have frequently led to worker flight.

In particular, the association opposed allowing organizations responsible for administering and supervising the TITP to also take on the role of registered support organizations for SSWs. Rengō, the trade union confederation, took a similar position, as did rights-oriented organizations such as the Japan Federation of Bar Associations (JFBA) and Solidarity with Migrants-Japan (Ijūren).

Instead, both JFBA and Ijūren have called for public offices to take on responsibilities for providing services to foreign workers. They also both insist SSW1 workers should be able to bring their families, are skeptical of how employment mobility can be ensured for employees, and favor hiring workers through a direct employment relationship rather than through a recruiting agency. In short, they worry that problems inherent in the TITP will be recreated in the new worker program and that the latter’s rights, such the right to treatment equal to that of Japanese workers and the right to change employers, will not in fact be protected.

Early Implementation

The first nine months of the visa program’s life were largely spent on building the necessary infrastructure. The Japanese government has concluded agreements with 12 Asian countries eligible to send workers (see Table 3). Most of the occupational sectors that can hire these workers have begun to establish standards and offer skills exams throughout Japan and in select origin countries, and the few remaining sectors plan to offer exams by the end of March. Occupational groups that do not have ready applicants through the TITP led in offering exams during the first few months, revealing their urgent hiring needs.

Since applicants for the SSW1 visa who are not transitioning from the TITP program need to pass a Japanese language test, the availability of exams has been a major constraint on the ability for these would-be workers outside of Japan to apply for a job and a visa. However, foreign residents already in Japan on other types of visas initially have had easier access to the exams and to employment opportunities.

The exam system has not been the only administrative obstacle. Getting a position requires having a contract with an employer that has secured a relationship with a registered support organization, which incurs further costs, and that accepts the freedom these workers have to change jobs. While the system of registered organizations is new, by February 2020, approximately 3,800 had been registered, putting in place one more piece of infrastructure.

The Results Thus Far and the Road Ahead

During the early months of implementation, some of the system’s contradictions and hidden costs have emerged in ways that support some of the earlier criticisms. In particular, the method for transitioning from the TITP to the SSW visa system sets up roadblocks that are most likely to affect small employers, who have especially benefited from the trainee program. The new worker visa categories impose additional costs, even for those relying on work-interns from the TITP. The employer has to have contracted with a registered support organization or be registered as one itself. Especially in rural areas, obtaining the needed information and understanding the requirements, then providing the requisite documents, has imposed costs on already strapped small businesses. Furthermore, anecdotal stories of employer resistance to supporting workers’ change of status from TITP have emerged, partly because doing so would allow the freedom to change employers, after the sponsoring employer has invested in them. For small employers in rural areas, the incentive structure may well preserve the preference for TITP workers, if only to ensure that SSW workers do not leave for other areas. The results thus far suggest reasons why regional inequalities may not be helped much by the new program and why full protection of workers’ rights is likely to be a problem.

For employers and the migrants they recruit directly as SSW workers, however, the lack of a previous TITP relationship may be significant for changing employment relationships. Although the employer has to make an investment, it begins on different terms with a different degree of dependency by the worker. In moving from TITP to SSW, a worker essentially remains dependent on the employer into the SSW stage and is not in a position to “shop around” before shifting to SSW. In contrast, migrants who bear the related costs and study to pass exams before being hired should have a greater degree of choice in finding an employer, whether through current residence in Japan or through the recruitment process in their own country. Moreover, the ground rules in terms of rights and the freedom to move to another employer are laid out in the relationship from the very beginning, even though this does not negate the potential for their violation.

For would-be migrants not currently in the TITP (but who may have past experience in it), the program is most accessible to those already in Japan because of easy access to exams, local knowledge and contacts, and opportunities for language study. Those applying from overseas face greater hurdles meeting exam requirements and obtaining a contract, which can cost time and money, but after April 1, 2020, even those on tourist visas will be eligible to take the exams. Former work-interns with needed occupational and language skills may have an edge, because of previous employer ties and because the system offers a way to return to work in Japan once they pass the skills test. Otherwise, studying to develop needed Japanese language proficiency and work skills adds to migrants’ costs, although preparatory training schools have been proliferating abroad.

Fundamentally, while the new medium-skilled labor migration system builds on the existing TITP in problematic ways, it also opens new avenues for migration and potential settlement. With the program still in its early days, analysis of the impact for migrants and employers alike will have to await further evidence. Yet the apprehensions expressed by key participants, combined with anecdotal stories thus far, raise warning signals of what to watch for, on top of longer-term patterns of employer and foreign worker choices. Primary among these are:

• The linkages with the TITP. Because of how the system was designed, will those who transition from TITP end up being protected less than those who enter the SSW category directly, resulting in a visible two-tier system?
• Pressures for separating the TITP and SSW programs, or even eliminating the TITP. Will problems in the current linkage of the TITP and the SSW produce unintended consequences that increase pressure to make the two fully separate programs?
• The politics of regional inequalities. Will TITP end up being the choice of isolated rural employers, while the SSW program is favored by larger-scale employers and those in urbanized areas?
• The impact of support organizations and one-stop support centers. Will the support organizations required by the SSW system and the availability of one-stop support centers make a difference for retaining foreign workers? How well and how quickly will the broader one-stop support centers envisioned by the national government take root, especially in more isolated and less fiscally sound areas?
• The implications for long-term settlement. The SSW2 status and the separate care worker visa options offer a route for those who can meet the requirements to settle permanently. But for the SSW2 status, many dimensions remain unknown: How many sectors will be included and how many migrants might be eligible? How difficult will skills exams make it for migrants to obtain SSW2 status? Given the likely number of years needed to become eligible for the SSW2, will workers find it more advantageous to follow a circular migration path instead?

On paper, the new system of medium-skilled migration offers prospects for increased labor migration, protections for human rights, a comfortable environment for workers, and an environment that welcomes them for an indefinite period. It does not, however, encourage immediate permanent settlement. In reality, how the system works will depend on how it is fully implemented, the economic incentives that determine the choices that employers and migrants alike make, and society’s capacity to adapt to major economic and societal changes.

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