Worker crunch piles pressure on small-town Japan

He has cut out unprofitable products and, with government support, invested 80 million yen to automate his lines. But Shiota said he has little ability to pay workers more beyond a recent increase in the minimum wage, which will rise again next year.

If even tax-payer funded corporate welfare subsidies, socialism for capital owners essentially, still cannot result in these owners paying labor living wages most probably they should not be businesses.

Nationalize them, make a workers cooperative etc.

Kashiki Seishi, a maker of washi paper, used to source everything from local farmers, according to chief executive Hiromasa Hamada. But since 2017 the six-person company has also depended on volunteers from a program that allows people to work on farms in exchange for room and board.

Relying on volunteers to run a business? Seems like a really poor business model. I doubt this business is attracting the best workers if they are simply working for free board.

There actually is no "worker shortage". If these companies offered an attractive salary - say, ¥2000/hr - those unfilled positions would be snapped up within seconds, and potential staff would not make a beeline for the higher salaries in Osaka and Tokyo. Plus those waiting on the sidelines would sprint back into the workforce.

some companies have plugged labor gaps by employing short-term workers from Vietnam and other Asian countries. But a weakening yen makes it harder to attract foreign workers.

Even Vietnamese labor that being underpaid is not interested to really work in those companies in Japan.

"I don't think it's healthy for a business to rely on volunteers," said the 44-year-old Hamada, a seventh-generation papermaker.

Not healthy for people that need jobs either!

Is it completely out of the question for him to raise his prices to cover wages and other costs? Or would most of his customers abandon him for a cheaper supplier?

you'd make more money importing toilet paper from china and selling it. there’s a reason it’s the #1 exporter of toilet paper.

There is no shortage of workers in Japan. There is, however, a serious dearth of decent jobs paying a living wage. Increase wages, and watch those vacancies disappear. If you can't increase wages, you have a rubbish business plan and your business should fail.

dear shachosan

we live in market economy.

you want d business and make a profit?but have no workers?

attract them with working conditions and salaries.

there is no shortage of labour here.

if you are able to dos-your business may survive and may be profitable.

if you dont get my words right-your business will be sinked thanks to your lack of business sense and thanks to your GREED.

as simple as is.

Fundamentally this is an uchi vs soto issue to it's core.

These days, location far LESS important, look at growth of SpaceX in the middle of NOWHERE in South Texas!

Start with a positive ....

Niyodo river, where it meets the ocean , produces some of the best waves I,ve see in Japan.

River pushes the sand out to sea and triangular sand banks are formed.

But agree with all comments.

Japan needs a "Commodore Perry - like intervention " to slap it out of its old ways.

there is no shortage of labour here.

Yes, there is. Unemployment is at its lowest level in decades, and simply saying that if you pay more then you can get the workers is not true. The population is dramatically shrinking, so of course there will be labor shortages, it is that simple.

RE: Is it completely out of the question for him to raise his prices to cover wages and other costs? Or would most of his customers abandon him for a cheaper supplier?

The answer to that question is, Yes. in a heartbeat!

Yes, there is. Unemployment is at its lowest level in decades, and simply saying that if you pay more then you can get the workers is not true. The population is dramatically shrinking, so of course there will be labor shortages, it is that simple.

Absolutely clueless.

Japan doesnt need foreign labor. JGov only care about tourists to fill coffers in short run

Hmm, a guy who was making disinfectant wipes (!) during Covid is struggling two years later, in spite of an injection of public money for new machines to up his efficiency/lower his costs.

This does not sound like a business that is very sustainable going into 2025. What any company did in the past means nothing, and yes this includes Nissan. Unsustainable things can't be sustained.

Giru...if supply of labour is shrinking, wouldnt standard economics say cost of labour would increase ?

I think it does.

A basic supply/demand intersect.

Article says Japan is worlds fourth sized economy.

I remember when it was number two.

What happened ?

Actually, what DIDNT happen more accurate.

For all the" truth " about Japan and long term planning in business , absolutely NO PLANNING on the demographic aspect.

Calling all non Japanese "foreigner " is the best example of the aversion to change and issues of immigration.

'Nationalise them'? And what good would that do? Taking the experience out of management and replacing it with politicians and their staff - amongst the least competent people in society, with no experience of running a business - is not going to magically create workers to do the job.

quote: Nationalize them, make a workers cooperative etc.

These are two different concepts. The first is usually an admission of failure and works really badly - British Leyland for example. The second rarely survives. We are not bees or ants. Socialism is utopian in concept but a disastrous horror show when actually attempted.

quote: If these companies offered an attractive salary - say, ¥2000/hr - those unfilled positions would be snapped up within seconds.

Don't count on it. People move to the cities for other reasons than earning a few Yen more. Would you move to rural Japan and make adult nappies for ¥2000/hr? Or are you above that? Should this be something the plebs are dashing to do? Perhaps someone should tell them. And if they wouldn't go, would you make them?

Besides, if you have to hugely hike the pay, you have to hike the prices to cover it. Nobody on here seems particularly happy with the inflation they already have. Are you all volunteering to pay more for everything to cover those higher wages? Small businesses do not have war chests of ill gotten gains. Most of them are struggling to survive as inflation bites. Increase your prices and most consumers will switch to cheap imports. Do you then block those imports and force people to pay higher prices? That worked without inflation. Not sure how long the LDP will be able to do it now inflation is snapping at purses and wallets.

quote: less-dynamic companies are swept away, allowing workers and capital to migrate to more productive ones.

And what if all your farms are 'less dynamic' than other companies? What do you eat?

It's true that the rigidity of Japanese industry - zombie corporations, job for life etc - is not a healthy way of running an economy, but it is so embedded in the culture and traditions of Japan, any reform process may be comprehensively destructive. And these are not faceless corporations with zillions in the bank crushing the little guy. They are the ordinary folk that make up the fabric of Japanese society.

quote: Not healthy for people that need jobs either!

Neither volunteers nor migrants are stealing any jobs from the locals. There aren't any locals to do the jobs. That is the point of the piece. Migrants do not steal jobs, they do jobs that would not otherwise be done. Get rid of them and you end up like Brexit Britain - all your services begin to collapse and prices shoot up.

The LDP may perhaps have a plan that, on paper, will see this 'economic metabolism' transition Japan smoothly to an economically strong utopia. Just like Boris did. I suspect the LDP may be clutching at straws in an increasingly difficult situation and are winging it, hoping for the best. I'm not sure it is possible. It may require more time, luck, ability and money than is to hand. If it fails, as it has done in the UK, the resulting decline is almost impossible to manage and comes with brutal political, economic and social damage.

Eat the left....back to "normal ", under Trump.?

I,d like to see that lol.

I await the coming comic theatre with interest.

Although I feel sympathy for some of these people, especially those who have inherited family businesses, and especially those who have tried to make investments and changes, some things are just destined to die off.

Unfortunately, rural-based manufacturers are a bit of a relic of times gone by, and the odds are against their survival. Times change, and we have to move with the times.

As some have commented already, raising the wages is not going to get people to live in an awkward place, and a generation of young people who have arguably been educated better than their parents and grandparents are not going to want to do that kind of work.

What happens in 10 years when all of this company's manufacturing has become automated? Well, then the taxpayer has to take on the unemployment costs of the immigrants he's just laid off. That's what. Move your plant to Tokyo where there is plenty of labor, or fold your dying company. Japan is downsizing in an age in which mass automation and AI will have rendered 50% of current jobs obsolete within the next two decades. In the meantime some towns are seeing some revitalisation. Those that hold no sway will pass on into history for good reason. Those that see revitalisation will do so for good reason. Time to let nature take its course. Immigration is a short-sighted solution that will only end up creating a bigger problem down the road.

Recruit Works Institute is an independent research institute dedicated to creating a next-generation society where each individual can engage in active, meaningful work.

Wow! A recruit company tasked with finding work and workers is mewling about needing more workers for dying companies. Colour me shocked! How about this Recruit Works Institute...how about letting dying companies die so that the number of companies better suits the shrinking population that is levelling off to a more sustainable level. If your company holds no sway in terms of productivity meeting demands then it is of no use to Japan. Get out of the way. Downsizing is necessary at this point in Japan's history. The population is bloated!

Wow! A recruit company tasked with finding work and workers is mewling about needing more workers for dying companies.

Well, that is their field, their expertise. Who did you expect to have the information and experience to be able to talk about this, a sports magazine?

how about letting dying companies die so that the number of companies better suits the shrinking population that is levelling off to a more sustainable level.

So your solution is to leave more people unemployed so the problems that will come when the economically dependent population require more support from the society come earlier? That is like solving disease by letting people die from it. It solves nothing and instead creates extra problems.

Downsizing is necessary at this point in Japan's history.

Not at all, specially when the current system depends on more people working, not less. To say less workers is a solution you first need to have a solution for the social security problem that is coming. Without that solution you are not talking about something positive for the country, you are just trying to ignore the actual problem that is coming and pretend that would solve it.

Literally none of the commenting folks here have ever been to Ino city, let alone met someone from the papermaking industry there. Yes, I have.

It's quite condescending to just say "close your bad business", and comments like "people won't live in an awkward place" are straightforward ugly.

The reality is that many artisans around the country have been experimenting with ways to continue the traditions in sustainable ways. Some have transcended the fixed traditional image of "this fabric is only for kimono's obi" and are creating new products in collaboration with famous (including international) designers. Others target the luxury market - expensive kimono, intricate tansu chests, etc. I hear more and more about young artists entering traditional craft factories as employees and this happens in all kind of "awkward places".

Lack of people is a real issue though, and so are low wages, although from my observations younger people moving to or working in the countryside are not as wage sensitive as JT readers. A lot of them are actually super happy to help their preferred region with its revitalization. Communities help a lot, so making families and raising children isn't such a dramatic issue.

What is necessary here is a stronger government aid towards struggling businesses and outlying areas, particularly to businesses that have already adopted DX improvements. Subsidies, grants, more focused aid on assisting moving to live in that area, tourism promotion, networking with similar businesses in other areas, etc, etc. That's what the state is for. Saying "close your bad business and let people buy the cheap Chinese imports" would actually make you a very bad politician. Good that most people here can't run for politicians in Japan!

If only there was literally billions of people willing to move there and work if you invited them. Oh well, guess everyone goes broke?

@david bent, as an employer I sort of agree with most of your comments, but it's not that simple, he wants to move forward and to keep a traditional going, and yes there is a market for his products, a easy way for him to achieve this would be a tax and interest free loan from the j government, this would give him some working capital, he can then advertise for staff and they will come solong as it's a good paying job and it's a stable position, now you have staff, now you can up production , now the orders can be full filled, after 6 months his co will be flourishing, then he can start to pay the loan back, and then he's back in the black financially, and may be start taking orders for other less profitable goods, this is how you stop stagnation, investment! Rather than saying arr well stuff it give in cus your no good

they will come solong as it's a good paying job

But I guarantee it won't be. The job will be paying about 230,000 yen per month gross, if you're lucky.

Merge, move or die.

People thinking work whatever the low stagnant wage it is is sustainable have the demonstration it does not bode well with a florishing industry.

Rare and efficient products sell high prices so pay should be high. Of course it does mean not only the boss and executives get the rise (I know some do that in Japan...)

There are plenty of people looking for work in Japan but at a decent wage and with decent conditions.

Example: the upcoming Osaka Expo has attracted job seekers at a ratio of 28:1!

(6 months contract)

Yes, for every one job, 28 applicants have applied.

It’s obvious that people want a job that can pay a living wage not just subsistence level.

In this example, I really hope that another worker comes by. But no, not for operating the third machine too, but for making babies there, so that they have enough citizens and workers in the future. Do you understand the basic biology and logic? The answer is not anymore automation and running machines without interruption for maximum efficiency and profit. The answer is to set current work force free from work under same continuous payments, for that they have the possibility to have marriage, family and children. Happy paper and baby production. lol

Increase Wage Otherwise Yaks Will Make Japan YakGuni By Giving Youth Double American Wage Through YamiBite