Possible labor exploitation in Japan?

The Revised Immigration Control Act was passed by the government of Japan to address its labor shortage issues across a wide variety of industries. This was aimed to encourage the influx of skilled foreign workers with the promise of a special residence visa that ranges approximately between three (3) to five (5) years. With this, one question surely comes to mind: Is Japan simply looking for cheap labor or will it ensure the protection of skilled foreign workers who are capable and willing to resolve this serious labor shortage problem? Recent trends show that the Japanese government is taking active measures to regulate and educate the local employers in Japan to protect these valuable human resources without necessarily running them out of business.


Photo credit to: https://news.glonaabot.com

In March of 2019, the Japanese government enacted ordinances in order to regulate the wages and salaries of foreign workers in Japan. This is in line with Japan’s new shift in immigration policy of encouraging foreign workers in order to address its serious labor shortage concerns among various industries. With this new policy in place, the government of Japan acknowledges that the surge of foreign skilled workers may result in possible labor exploitation as some local businesses will be looking to hire cheap laborers. In order to curb this issue as early as possible, ordinances were enacted to ensure that foreign workers in Japan would be provided wages which are similar or even higher than those granted to Japanese nationals.


With this new development, it is encouraging to see that (according to the latest news reports) a little over two thirds of the companies in Japan which hire foreign workers provide equal or higher wages to their foreign employees compared to their local staff. This was based on the data gathered by the Japan Research Institute (JRI) between January to February of this year from approximately 1,000 companies all over the country. Unfortunately, however, only about 41% of the 1,000 companies reportedly employed foreign workers. A considerable number of companies in Japan apparently intends to prefer hiring Japanese nationals due to the perceived complications in the process of personnel affairs management.


All is not lost however as the research conducted by the JRI revealed that 78.9% of the companies that hired foreign workers were compliant with the new ordinances set in place. In fact, 1.8% thereof were said to pay higher wages to their foreign workers when compared to the salaries of their local employees. On the downside, JRI discovered that around 18% of companies employing foreign workers failed to comply with this new mandate and paid their foreign employees either the minimum wage or less than the wages offered to their Japanese staff. Apparently, small and medium sized companies are not too keen on providing competitive salaries to foreign workers.


In this regard, the Japan Research Institute stated that, “If companies become reluctant to raise wages, they would not only risk losing the global race to attract foreign workers but face challenges in sustaining their operations in the future.”


Reference: 77% of Japanese firms say foreign workers not discriminated in pay


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