Japan must quadruple foreign workers by 2040 to meet growth target

Japan needs about four times as many foreign workers by 2040 to reach the growth path the government has outlined in its economic forecasts, a group of Tokyo-based public think tanks said.

The findings highlight Japan’s growing reliance on migrant labor to offset its declining population, while its ability to attract foreign talent has been hampered by strict border controls to curb the spread of COVID-19. that have left out students and workers.

Japan must increase the number of foreign workers to 6.74 million in 2040 to maintain an average annual economic growth of 1.24%, according to the optimistic scenario of “high growth” that the government has established in its long-term projection, according to the report.

The figure would be almost 300% more than the current 1.72 million foreign workers, who represent around 2.5% of the active population.

“We must discuss the acceptance of foreign workers with a greater sense of urgency, as competition for labor will grow in the future against countries like China”, said the president of the Japan International Cooperation Agency (JICA), Shinichi Kitaoka, at a symposium on the investigation.

“We have to take measures to make Japan attractive in the long term, a country to be chosen by foreign workers.”, he added.

The study assumes that Japan will lose more than 10% of its national workforce in the next two decades. Its population peaked in 2008 and has since declined due to its low birth rate, reaching about 125 million last year. The working-age population is shrinking even faster due to ageing.

The study also took into account the capital stock, which it assumed will continue to grow at 1% per year thanks to investment in automation technologies. Without that, Japan would need 21 million foreign workers by 2040 to meet the growth target, which is “practically impossible”, said a researcher at the symposium.