Foreign Workforce in Japan Faces a Shortage of Almost a Million Workers by 2040, Think Tank Says

July 4, 2024
Foreign Workforce in Japan

Foreign Workforce in Japan Faces a Shortage of Almost a Million Workers by 2040, according to the latest estimate by the Japan International Cooperation Agency’s research wing. The country would require close to one million more foreign workers in order to attain its economic growth rates, given the declining population. Here is an analysis of the problem and how it may affect Japan in the future.

The projected shortage 

With the current growth rate, Japan is expected to have 5. It is expected to reach 91 million foreign workers by the year 2040. Nevertheless, this figure is still short of the required foreign workforce for a targeted 1 percent average annual growth of nearly one million. undefined    Such a bleak prognosis points to the increasing significance of overseas workers for Japan’s economy, specifically for addressing the critical shortage of workforce due to the overall ageing of the population and low birth rate.

Reasons Leading to a shortage 

Thus, the demand-supply gap for foreign labour has been seen to be more than twofold what JICA forecasted in 2022. This adjustment is made due to the weakness in the economies of countries such as Vietnam, Myanmar, and Cambodia, which are significant source countries for migrants to Japan. If economic opportunities increase in these countries, more workers may stay home rather than seek employment in Japan, which continues to face a shortage of workers. 

Challenges faced by foreign workers in Japan

Currently, international workers are essential to the Japanese economy, especially in low-wage positions and special technical vocations. The population of foreigners in Japan has increased for the last 15 years, from over 500 thousand to 2.05 million in October last year, which may comprise about 3% of the total workforce. Work visas have been liberalised by the government for the shortage of employees in a number of fields, and there has also been a changing attitude of the people towards the immigrant work force.

Challenges and Solutions 

Many problems about employing foreign workers have emerged, as discussed below, even with increasing trends in the culture of Japan to accept foreigners as workers. Some of these factors include the exchange rate, which is the yen; low wages, which have been associated with Japan for a long time; and issues to do with human rights. These problems have led to questions about the strategies that Japan has to employ in order to assimilate foreign talent as it strives to maintain its relevance in the covenant human resource war. 
1. Competitive Salaries: Other attractive incentives include monetary and non-monetary incentives based on competitive remuneration packages that will be realistic and reasonable to offer irresistible human capital in the global market. 
2. Improved Working Conditions: Promoting contractual practices that are fair and treat human rights will be strategic towards labour retention. 
3. Strengthening Immigration Policies: If the Japanese government is keen on increasing the foreign talent pool in the country, they should consider easing the visa requirements and the routes to permanent residency.


It is projected that Japan will face a shortage of foreign workers—more than nine hundred thousand by 2040. These efforts have remained vital to ensure that Japan strives to meet its set economic targets for the flow of foreign talent. Concerning wages and human rights issues such as equal pay for equal work or honouring the rights of individuals seeking foreign employment, eradicating these troubles will be a critical way towards filling the gap and ensuring the continual growth of the economy.

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