Aging populations need more migrant labor

By Masanari Koike Source:Global Times Published: 2018/7/30 17:58:40

Illustration: Liu Rui/GT

Excited at the recently-concluded FIFA Russia World Cup, I should not be the only one who noticed the melange of ethnicities in top teams. We realize the proportion of foreign-born players is more than that officially stated. In most teams, it's over 10 percent with Switzerland having the highest with 29.3 percent in 2017. The children and grandchildren of migrants born in nations they migrated to are not counted any more as foreign-born. We could see how the ethnic composition of teams has changed in past World Cup matches beamed on CCTV ahead of the 2018 tournament.

This is one of the simplest examples of global human interaction. The teams with mixed ethnicities competed well or mostly better than those without them. With regard to professional leagues in these countries, mixed ethnicities and nationalities are more noticeable. For instance, the 10 of 11 starting members of the Japanese national team usually play in foreign clubs.

Beyond sports and sometimes beyond different political institutions, this trend is getting more pronounced in our generation. New Chinese industries more or less depend on talent from the US, and vice versa. The US, apparently dependent on immigrant labor from around the world, is also increasingly dependent on Chinese researchers and scientists for the fundamentals of the economy. For more than a decade, the most doctoral recipients in the US have come from top Chinese Universities.

The China-US trade dispute should not disturb such human interaction. Opponents of migration argue that immigrant labor enjoys higher wages. But in the absence of decreasing productivity or sales, profits drop and the business becomes less viable. Some are forced to leave the country because of an economic downturn. It is being said that artificial intelligence or robots could replace human beings in the future, enhancing productivity. But can such progress be achieved only with the help of domestic resources? And who will sustain the remaining labor-intensive industries, still so very much necessary for our society?

Fortunately or unfortunately, Japan cannot consider such exclusive measures. The country, with only 1.5 percent foreign residents, is faced with the necessity to hire more expat labor. Next April, Japan will increase by five more years the maximum period foreigners can stay in the country to undergo training in five industries - construction, shipbuilding, agriculture, nursing, and hospitality. It is not because policymakers want to please their upset constituencies but because industries and locals recognize it essential to set off the decline in population.

Decline in Japan's population over a long period has cast a shadow on its future. Three years ago, Nobel Prize-winning economist Paul Krugman suggested Japan could emerge from a protracted economic slump by using monetary expansion to control deflation, changing his optimistic views on that measure by pointing at Japan's "awesomely unfavorable demographics" as "prime candidate for secular stagnation."

One year before Krugman's statement, a report from a group headed by a former minister for public management showed the prospect that potentially half of the cities in Japan will "vanish" within 30 years, meaning a decreasing population and a dwindling number of children would affect the survival of these cities.

Of course Japan's policy change cannot easily attract foreigners. Stagnating salary levels, language barrier and a closed society make foreigners reluctant to move in. But there is no time for regret. In addition to the economy and society, people's way of living in Japan is getting more unsustainable because of the shortage of caregivers and housekeepers.

The case, to some extent, could apply to many other countries. High-tech industries over which China and the US are engaged in a tariff war are internationally running short of human capital.  While the two governments face down each other, entrepreneurs, engineers and investors come and go between Shenzhen and the Silicon Valley. Even a rapidly aging Chinese society with low birth rates has a serious shortage of caregivers. 

Economic growth and social sustainability are highly dependent on the quality and size of human resources. And the trend of open innovation lets us reaffirm the significance of diversity. This should also be necessary for China and the US to achieve high economic growth rates.

At future World Cups, we expect heated matches with a higher mix of ethnicities among teams and spectators.

The author is a visiting fellow at Tsinghua University and former member of National Parliament of Japan.

Posted in: VIEWPOINT

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