Episode #202: Productivity Not Immigration

During the economic “bubble years,” Japan’s rapid growth created a massive demand for workers in the so-called 3K jobs — kitsui (difficult), kitanai (dirty), and kiken (dangerous). When domestic labor could not keep up, immigration became an improvised solution.

The 1985 Plaza Accord strengthened the yen, sending Japanese companies and tourists abroad in record numbers. As Japanese workers became scarce, the government quietly opened the door to select foreign labor. Iranians arrived visa-free, and Brazilians of Japanese descent were encouraged to return. But many lacked cultural and linguistic alignment, leading to short-lived integration.

Mini-summary: Japan’s labor shortages are not new. Each time the economy expands, reliance on temporary foreign labor increases — without addressing deeper productivity and engagement issues.

When Japan’s bubble economy collapsed, jobs in low-skilled industries vanished. Many foreign workers returned home. Decades later, the demographic decline has brought the same challenge back — this time, with a shrinking consumer base and aging population.

Japan loses around 780,000 people every year, directly impacting consumption and domestic demand. Risk aversion has led consumers to save instead of spend, even with near-zero interest rates. Deflationary thinking persists, and economic momentum remains subdued.

Mini-summary: Japan’s population decline continues to suppress consumption, investment, and optimism — deepening the need for structural productivity reform.

Today’s “ghost immigrants” — foreign students and temporary workers — quietly sustain industries like retail, logistics, and food service. Many can legally work up to 38 hours per week, surpassing the French workweek. Yet, this policy is not called “immigration.” The government prefers a reversible system — nutrients without roots.

The question remains: Is immigration a sustainable economic lever, or just a temporary fix?

Mini-summary: Japan’s approach to foreign labor avoids political friction but creates instability — these workers fill gaps but cannot truly integrate or innovate.

Traditional economic logic suggests scarcity drives wages up. But in Japan, even with labor shortages, salaries for nurses, delivery drivers, and childcare workers remain stagnant. Companies hold record cash reserves, yet wage growth is flat.

The deeper issue lies in productivity and engagement, not headcount. Japan’s white-collar workforce remains underutilized, slowed by outdated work habits and overemphasis on appearance rather than outcomes.

Mini-summary: Without unlocking white-collar productivity, wage stagnation will persist — regardless of how many foreign workers Japan imports.

Japan’s love of robotics offers a technological response to demographic decline. Automation may ease labor shortages, but technology alone cannot solve organizational inefficiency.

True transformation requires freeing up latent human capacity. Many professionals work long hours without clear outcomes, driven by tatemae (superficial appearances) rather than effectiveness. Cultural norms — from presenteeism to fear of failure — suppress innovation and agility.

Mini-summary: Robots may fill roles, but only leadership and engagement can unlock sustainable productivity gains.

Low engagement remains Japan’s quiet crisis. Global surveys repeatedly show Japanese workers among the least engaged worldwide. Cultural conservatism, fear of mistakes, and lack of second chances discourage initiative and innovation.

Middle managers — often rewarded for stability over creativity — avoid “rocking the boat.” Yet the next wave of growth will require precisely the opposite: leaders who can inspire trust, delegate effectively, and reward experimentation.

Mini-summary: Empowering leaders to create psychologically safe, high-engagement teams is Japan’s best path to reviving productivity — not mass immigration.

• Japan’s labor crisis is recurring — immigration has historically been a temporary fix, not a cure.

• Wage stagnation stems from cultural and managerial inefficiencies, not just labor scarcity.

• True productivity growth depends on leadership, engagement, and cultural change.

• Unlocking white-collar potential can offset demographic decline without mass immigration.

Founded in the United States in 1912, Dale Carnegie Training has supported individuals and organizations worldwide for over a century in leadership, sales, presentation, executive coaching, and DEI. Our Tokyo office, established in 1963, has empowered both Japanese and multinational corporate clients for more than 60 years.

We help companies strengthen employee engagement, improve performance, and lead meaningful cultural transformation—creating workplaces where people are motivated to contribute their very best.