A lot of people around the world have ambitions of working in Japan. Some simply want to live in and experience the culture first-hand. Others want first-hand experience working in the Japanese business world and a chance to improve their Japanese. Many see it mostly as a chance to send money to their families back home.
However, recent economic conditions are putting a massive crimp in these ambitions. Here’s why some people are reconsidering working in Japan.
The yen limbos its way into history
The cheap yen is the primary factor that makes working in Japan so depressing for foreigners. The yen is currently trading at historic lows against the US Dollar. Recently, it hit a peak of 150 yen to 1 USD – the lowest level in 32 years.
The plunge, says economist Nagahama Toshiro, is due to the US and Japan’s diverging monetary policies. The US has pursued a policy of quantitative tightening, while Japan has pursued easing[1].
Recently, Japan has increased its intervention in the foreign exchange market to offset the trend. Controversially, it’s done this without any advanced notice, raising the ire of some foreign economists and politicians. However, the intervention hasn’t ratcheted up the price significantly. (Japan’s Finance Ministry argues that the interventions have “worked” in that they’ve prevented the yen from free-falling to 160.)
In other words, if you’re getting paid in yen, your money’s worth less outside of Japan than it used to be. Previously, when it was trading closer to 117 yen per USD, 30,000 yen would convert closer to USD $258. Today, that comes out to a paltry $204. As a result, workers who have bills or debts in their home country are finding it harder to make payments.
The cheap yen also impacts the many workers in Japan who were attracted to the country’s high standard of living. Workers who send money back home to their families have seen the value of their money drop as the yen plummets[3].
It’s hard to see any trends in official numbers yet. But at least some foreigners seem to be contemplating packing up and heading to greener pastures. Some companies that specialize in work placement in Japan from countries such as Vietnam say they anticipate missing quotas this coming year[4]. That threatens to create a labor gap in critical areas such as construction and nursing care.
Stagnant wages make things worse
However, some argue that the weak yen isn’t even the worst problem. Another major factor in worker flight is Japan’s stagnant wages.
For the past 30 years, average wages have risen in the world’s largest economies. The exception? Japan, where wages have remained relatively flat. Minimum hourly wages in many European countries range from 1500 to almost 2300 yen. Meanwhile, Japan sits at a rock-bottom 961 yen. That’s USD $6.54 (likely less by the time you read this)[5].
Coupled with the weak yen, this makes it harder to justify working in Japan. For example, the majority of foreign workers in Japan (26.2%) come from Vietnam[6]. But the yen has fallen some 20% relative to the Vietnamese dong. In other words, worker’s wages aren’t keeping pace with inflation and their money is now worth a fifth of what it used to be back home.
Even some Japanese citizens are leaving
It’s not just foreigners who are reconsidering working in Japan. The word 出稼ぎ (dekasegi, earning abroad) is usually used for foreign workers coming to Japan. But recently, Japanese news has aired interviews with Japanese citizens who’ve realized that they can double their salaries by fleeing their home country.
In one recent feature, ANN News interviewed a Japanese man who’s been working in Canada. The Canadian dollar has also gained around 33 yen in the past few years. That, coupled with the higher minimum wage in Canada, means his income there is double what it was back home.
A metal worker in the same story said he doubled his monthly income from 350K yen to 700K yen by going to Australia on a working holiday visa. In a similar story, a young woman said she’s able to earn far more working at a restaurant in Canada. Between Canada’s higher wages and tips (tipping doesn’t exist in Japan), her part-time income jumped from 200K to 320K yen.
A handful of “person on the street” interviews don’t translate to a mass exodus. Working in countries like Canada, the US, and Australia requires passable English language skills, which not everyone in Japan has. But it shows that the incentives to work in Japan are dwindling even for its citizens.
Food for thought
Working in Japan has always had its challenges, such as navigating the country’s banking system. But the value of working in Japan is currently dwindling for anyone except those with zero obligations back home.
There are options for working remotely within Japan (though there may be tax implications for doing so). Spouses of Japanese nationals can work remote jobs and contracts on a spousal visa. Reporters, artists, academics, and others can obtain long-term visas through their employers or institutions.
The cheap yen also spells an opportunity for investors, who can obtain business manager or startup visas for less than ever. However, this still isn’t a cheap route – you’ll need 5 million yen (currently USD $34,000) to take advantage of it.
Otherwise, if you want to work in Japan for a Japanese company (or a branch of a foreign company), you’ll need to decide how much that’s worth to you.
We’ll know in three to six months just how many foreign workers are choosing greener pastures. If it’s significant, that could have a massive impact on businesses that are already struggling to fill positions. The consequences for Japan’s economy and society could be grim indeed.
Sources
[1] 円安を逆手に海外企業の生産拠点誘致を 日本が「世界の工場」になれば経済は復活する. Money Post
[2] Japan spent record 6.35 tril. yen in Oct. yen-buying intervention. Kyodo News
[3] 「別の国に行きたい」円安が招く働き手の“日本離れ” 海外送金所で漏れた本音とは. TV Asahi News
[4] 進む円安 細る外国労働力. Nikkei
[5] 止まらない円安と上がらない賃金 1ドル150円突破の意味…日本から労働力が流出する動きも？【サンデーモーニング】【手作り解説】. TBS News Dig
[6] 【外国人労働者の国別内訳】出身者が多い国は？今後の動向、注目国を解説！Gaikokujin Rodo Saponetto
[7] 【円安】恩恵は…外国人だけじゃない 給料2倍 海外に「出稼ぎ」急増(2022年10月18日). ANN News – YouTube
