New expert labour policy: not enough?
An interesting article about the Japanese immigration law and policy reform in Nikkei Shimbun
This move by the Japanese Ministry of Justice will enhance the immigration of foreigners who are experts in their fields into Japan. As one part of the new changes, based on a special point system, foreigners being considered as experts with the intention of working in Japan will be able to more easily get permanent residency status, e.g. qualifying after only 5 years, instead of the current 10 years of legitimate stay. This system was taken from the British, Canadian and South Korean models. Germany a while ago introduced efforts to bring in Indian IT specialists by giving them special Green cards.
Certainly it is a good move to open Japan and make it more international and also further increase the high standard of innovation and intellectual property. But does this move really help the current problems Japan is facing? Japan’s most obvious problems are the enormous debt to GDP, and the aging population in which people over 65 will represent more than 1/3 of the population by 2025, costing 4 to 6 times more in health costs than younger groups. Domestic costs are continuously increasing, and the government spends more money than they are currently earning. Since the earthquake and tsunami of 3/11/2011, there is also an exodus of Japanese experts to other countries, especially those who are able to speak other languages.
To address these issues effectively, Japan requires more immigration not only on the expert level, but also at other levels such as unskilled labour. To name a few beneficial effects of this, domestic wages level can be lowered, and consumption can be increased. Additionally, foreign workers in Japan will create an outflow of the strong JPY to purchase goods and services in their home countries. This will lead to better equilibrium price levels for JPY.
To summarize, it is a good first step and it is to be hoped that Japan will continue with similar improvement efforts on a macro level to benefit the Japanese economy.