Saturday, October 19, 2013

“Unskilled” Labor in Japan vs. Selected Host Countries

The Government of Japan (henceforth, GOJ), in point of fact, has not issued an ordinance or any formal directive banning the acceptance of unskilled foreign workers.  Instead, it formally declares the specific types of work that it allows, as seen through the categories of “Status of Residence” which define the approved scope of activities of foreigners.  Work that doesn’t fall into any of these categories can be viewed as unskilled.

Another way to get a glimpse into what types of unskilled work GOJ does not want foreigners doing in Japan is through the listing of jobs held by foreigners before they were arrested for illegal work, that is, engaging in work for which they had no prior authorization to do.  Table 18 below lists the work activities or job titles in what is deduced to be the skilled and unskilled labor dichotomy in Japan.

Table 18: Skilled/Unskilled Work Categories in Japan
To be sure, being arrested for illegal work doesn’t automatically mean that one was doing unskilled work.  Building an indicative range of salaries between the lowest paying, unskilled job and the highest paying, skilled job may help to corroborate or invalidate my tagging of the jobs listed as illegal work in Table 18 above as unskilled.  While GOJ refrains from explicitly using the term “unskilled,” it spares no effort in expounding on the value of “skills.”  But by doing so, that is, by belaboring its preference for skilled labor, GOJ necessarily sets the measuring scale for the entire range of skill sets, including the unskilled.   By quantifying the detailed characteristics of the highly-skilled, GOJ unavoidably concretizes the features of the unskilled.

Not only is the possession of “skills” one of the requirements for foreigners to gain permanent residence in Japan (ICRRA, Article 22,2,ii)   but those with more of it are not simply preferred but vigorously pursued.  A points-based system  installs a virtual hierarchy even among the skilled, rewarding the highly-skilled with what the GOJ calculates to be effective motivators, hoping to convince those already in Japan to stay longer, and enticing new talents to choose Japan over its competitors.  The skilled with more education, more experience, higher salaries, younger in age, proven research experience, officially-recognized licenses and higher executive positions are allowed to have multiple sources of income from a wider range of authorized activities, twice-faster tracks to permanent residence, unrestricted work hours even for the spouse, and the privilege of bringing in a parent or domestic servant for the married-skilled with children.

This new system of the GOJ is not short on innovation, even grit, undoubtedly building upon lessons from similar points-based systems of its closest rivals,  hoping to lock in on the super skilled selling his wares to the highest bidder.

Figure 16:  Skilled and Unskilled Foreign Workers by Income and Age (Derived) 
But while a detailed comparison between points-based systems of other destination countries is beyond the scope of this paper, it will be sufficient for now to focus on the annual income criteria which it combines directly with age criteria, an innovation unique to the Japan’s points-based system.  The way points are awarded to annual income levels of the highly-skilled  is quite revealing when juxtaposed against the monthly pittances of the desperately unskilled,   as shown in Figure 16 above.
The poorest among the pinnacle of the highly-skilled earns forty-two times more (30 million yen annually, or higher) than the richest among the underbelly of the unskilled (720,000yen  annually, or lower).   The lowest annual income group of the skilled (4-5 million) which is rewarded points is out of reach by nine out of ten of the unskilled (93% earn below 2.4m) by at least a factor of two.   The GOJ is willing to reward the older among the highly-skilled only if they earn higher incomes as they age – but only up to age forty.  And since roughly two of every three unskilled workers are over 30 years of age, the disparity in rewarded income levels gets wider (since after age 30 rewarded income targets increase) as the unskilled get older (adding the hypothesis that the older one gets, the lesser one earns).

At this point, I must discuss one possible flaw to the logic and thus validity of arguments drawn from Figure 16.  It may be argued that the annual income ranges in the points-based system are purely indicative, or theoretical and intended for policy purposes and, as such, should not be compared with the declared income declarations of those arrested for illegal work.  While the points-based system is indeed policy-based, it must be noted that its stated objectives are to attract new talent or motivate existing ones to stay longer or permanently.  If this is so, then it is reasonable to assume that the annual income ranges reflect reality to the degree of accuracy that GOJ targets to achieve.  If income ranges higher than current average incomes are used, then the points-based system will attract fewer applicants as only the highest-paid, highly-skilled workers may apply.  If the income ranges are set lower than the current averages, the system may attract more applicants.  I thus use the income ranges in the points-based system based on the assumption that GOJ targets more applicants.

Indeed, the income-based rewards of the points-based preferential scheme have, quite tellingly, exposed GOJ’s intense preference for younger, richer, smarter, more influential, highly-skilled foreign workers, thus also confirming its anathema, the unskilled workers.

Japan may think that it is competing with other destination countries only for highly-skilled migrants, yet why do Australia,  the United Kingdom  and Canada  have explicit, formal and institutionalized immigration processes (see Table 19 below) that allow entry to foreign workers who in Japan would be viewed as unskilled?
Table 19: "Unskilled" Worker Entry Options in Other Host Countries
To be fair, these jobs are not easily taken by just any Tom, Dick and Harry.   Formidable requirements are in place precisely to ensure that skills are legitimate and that they hit the ground running, so to speak, upon arrival with a job already waiting for them.  Nevertheless, the point I would like to stress here is that unlike other destination countries which have developed systems to tap into the pool of foreign workers of all skill sets, Japan has persistently maintained a monolithic immigration regime exemplified by its policy or “non-policy” on unskilled workers.