Can Immigration Reform Really Save Japan - Literature review Example

"Can immigration reform really save Japan?" Japan is one of the major economic powers, not only in the South East Asia, but also in the world as well. “In 1980, Japan’s financial system- and in particular its banking system – was the largest in the world” (Suzuki, p.1). Even though the economic growth in Japan was impressive until the beginning of the 80’s, it was not so since then. In fact, Japan has started to face severe economic problems from 1985 onwards. Growth started to decline in all critical economic sectors in Japan from 1985 onwards. According to Hoshi and Kashyap (p.3), taxpayers in Japan have lost almost 20% of Japan’s GDP because of the economic stagnation after 1985. Japanese political administration and economic pundits are working hard to revive the ailing Japanese economy. However, these efforts were not met with success yet. Economists have different opinions about the reasons of economic crisis in Japan. Some of them blame macroeconomic factors whereas others blame microeconomic factors for Japan’s economic crisis. In any case, it is a fact that the present economic climate in Japan is not so good compared to that in the 60’s and 70’s. Chris Burges, in his article, "Can Immigration Reform Really Save Japan?" argues that immigration may help Japan immensely in regaining its economic growth back on track. He has pointed out that out of the forecasted 86 million population in Japan by 2060, 40% would be over the age of 65. In other words, rising life expectancy and falling birth rates cause rapid ageing in Japan. Burges argue that without immigration, Japan may struggle to find enough labor power to meet the requirements in near future. This paper analyses the claim that immigration reform can really save Japan. According to Hidenori Sakanaka, a former director of the Tokyo Immigration Bureau, Only immigration can save Japan. He proposes bringing in 10 million migrants over 50 years (Burges). It is a fact that Japanese products are still number one in terms of quality in global market. Chinese products are dominating in global market at present, primarily because of the cheap price. On the other hand, quality conscious consumers still go for Japanese products if they are capable of spending few dollars more. In other words, higher price is the major problem which prevent Japanese products from competing in international market. The major reason for the higher prices of Japanese products is the expensive labor. In other words, manpower shortage is a severe problem in Japan at present. It should be noted that China is the most heavily populated country in the world and hence they are not facing any manpower shortage there despite of the one child policy. On the other hand, the population size in Japan is small compared to that in India or China. Moreover, Japanese people are not much interested in having more children in their family life. As a result of that the number of new born babies is decreasing while the number of ageing people is increasing in Japan. The upcoming generation is an asset for any nation since it has the potential to contribute heavily to the productive sectors in future. On the other hand, ageing people mostly serve as a liability to the government because of their inability to contribute to the economic growth. Making the Japanese workforce younger is necessary to revitalize Japanese economy. In a heavily globalized world, this can be easily done. It should not be forgotten that exchange of workforce and other resources are some of the major characteristics of globalization. Therefore, it would be easy for Japan to import manpower from heavily populated countries and thereby control the rising manpower cost in Japan. “The report, entitled ‘Replacement Migration: Is it a Solution to Declining and Ageing Populations?’, points out that Japan will need to accept more than 600,000 immigrants a year until 2050 simply in order to sustain its economy at 1995 levels” (Burges). Japan has many lessons to learn from American state California. California is one of the cheapest labor markets in America because of the excess immigrants there. Most of the immigrants, in California accept even cheaper work offers which normally the locals may not be ready to do. Thus the business people have the luxury of cheap labors which increases their profits. The cheap labor helps business people to reduce the price of their products in order to compete more effectively in the domestic and international markets. Although the arrival of younger migrants may nudge down Japan’s median age there is no guarantee they will also have more children. Those settling down in Japan will be affected by the same disincentives — insufficient childcare support, poor work–life balance and high education and other costs — that discourage Japanese from having more (or in many cases any) children. Clearly, immigration is not a solution to the problem of the low birth rate (Burges). From the above observations made by Burges, it is evident that Japanese social systems need to be changed drastically to solve the labor shortage problem permanently. There is no point encouraging immigration and allow the immigrants to follow the footsteps of Japanese people. If the immigrants fail to have more children in their home, Japan may face more problems and challenges because of immigration. Japan should make sure that the immigrants keep their local culture in tact while living in Japan, instead of assimilating with the Japanese culture. “Perceptions of Japanese as being unique and homogeneous continue to play a key role in structuring both Japanese national identity and social reality” (Burges). Immigration reforms are not fully supported by the Japanese people even though they do not have any doubts about the potential of immigrants in contributing to the economic growth. Japanese people believe that uncontrolled immigration may cause demographic imbalances in the country and the future of the local culture will be in jeopardy. At the same time, Japan should realize that the country cannot survive in this heavily globalized world without seeking assistance from others. Even America is not putting any control on immigration despite of the 9/11 terrorists attack. In fact majority of the American works are done by the expatriate community. It is impossible for America to think about a future in which only the Americans work in the hard labor oriented sectors such as construction and real estate. Middle East is another region which is developing rapidly from the contributions of the expatriate community. Under these circumstances, Japan should think seriously about encouraging immigration as a measure to revitalize the economic sectors. To conclude, Japan is current facing severe manpower shortage in all critical employment sectors. As a result of that the manpower cost in Japan is extremely high compared to that in its neighboring countries such as China or India. It would be impossible for highly priced Japan products to survive in the market with the help of quality alone in future. Modern consumers give more importance to quality as well as cheap price while they take any purchasing decisions. Therefore, Japan should find ways to reduce the prices of the products produced in the country, while maintaining the same quality standards as before. Japanese social life or culture is not encouraging a family life with more than one children. Many of the married couples in Japan are not thinking about having even a single child. As a result of that Japanese population dominates with old people who are incapable of contributing to the productive sectors. In order to make the labor force younger, Japan needs to encourage people to have more children or they should encourage immigration. Works Cited Burgess, Chris. "Can Immigration Reform Really Save Japan?". 2014. Web. 22 June 2014 Hoshi, Takeo and Kashyap Anil K. “Japan’s Financial Crisis and Economic Stagnation”. Journal of Economic Perspectives—Volume 18, Number 1—Winter 2004. Print Suzuki, Yasushi. “Japan's Financial Slump: Collapse of the Monitoring System under Institutional and Transition Failures”. Hound mills, Basingstoke, Hampshire: Palgrave Macmillan, 2011. Print Read More