Japan’s labor market is undergoing a quiet but powerful transformation. As the local workforce shrinks, many companies are turning to foreign workers in Japan to fill the gap. More than 2.3 million foreigners are now employed nationwide. Over half work in companies with fewer than 100 employees.
This trend is not limited to large cities. In Saitama Prefecture, for example, Koganei Seiki Co. employs 40 Vietnamese staff among its 300 workers. These employees, hired under highly skilled visas, operate precision equipment and design production processes. Company president Yusuke Kamoshita said their capabilities match those of Japan’s top engineers.
Likewise, in Mie Prefecture, the historic ryokan Todaya hires 37 foreign workers from 11 countries. Many serve international tourists and speak fluent English. President Junzaburo Terada emphasized the importance of teaching them Japanese customs and hospitality.
Nationwide, the number of foreign workers in Japan has tripled since 2014. However, technical trainees still face serious challenges. About 470,000 of them report long hours, poor conditions, and unpaid wages. In 2023, almost 10,000 disappeared from their workplaces.
To improve the system, the government will abolish the trainee program by 2027. A new visa will replace it, allowing more flexibility. Workers will be able to change jobs after one or two years. However, the new system may restrict urban migration to protect rural labor markets.
Still, large cities continue to dominate. Tokyo employs over 585,000 foreign workers. Aichi and Osaka follow with large shares. In contrast, Akita Prefecture has only 3,536—just 0.2% of the national total.
Japan’s demographic future looks challenging. Experts estimate the working-age population will drop to 55 million by 2050. Labor shortages in healthcare, transport, and agriculture will deepen.
Tomoya Suzuki from NLI Research Institute believes long-term stability depends on smart integration. “The future of Japan’s economy,” he said, “relies on harmony between locals and foreign workers in Japan.”
