ArrowArtboardCreated with Sketch.Title ChevronCrossEye IconFacebook IconIcon FacebookGoogle Plus IconLayer 1InstagramCreated with Sketch.Linkedin IconIcon LinkedinShapeCreated with Sketch.Icon Mail ContactPath LayerIcon MailMenu BurgerIcon Opinion QuotePositive ArrowIcon PrintRSS IconIcon SearchSite TitleTitle ChevronTwitter IconIcon TwitterYoutube Icon
Economy

Young laborer shortage growing dire on Japan's construction sites

Xuan, a Vietnamese technical trainee at Masuyama Steel Construction in Toride, Ibaraki Prefecture, wants to work much longer in Japan.

TOKYO -- Unless some action is taken, the skills and know-how of experienced construction workers in Japan could disappear, as fewer young Japanese are willing to work in the industry and acquire them.

     Amid increasing demand for construction workers for reconstruction projects in the Tohoku area, increased public works as part of the ongoing economic stimulus package and the last-minute jump in demand for houses before the consumption tax rise, the shortage of such workers is becoming desperate.

     Currently, most trained workers are over 65 years of age and they are rushing to leave the field. An official at the Land Ministry said that unless experienced construction workers hand down their skills and know-how to younger workers now, there won't be any skilled workers left on construction sites a decade from now.

Safety net

Concerned about a lack of skilled labor in the future, the ministry organized in January an expert panel to discuss ways to draw more young workers to the industry.

     According to the panel, the biggest cause of shortage of young workers was the inadequate employment environment of the construction business, such as a poor social safety net.

     Currently, only an estimated 60% of construction workers are members of employee pension plans and employment insurance schemes, in contrast to a subscription rate of 90% among employees in the manufacturing industry.

     In February, the land ministry raised the unit price of labor in public works, an indicator that will be the basis of estimates of the public works budget, by roughly 7%. The increased funds will be spent on activities to encourage subscription to social security insurance.

     Mitsuyoshi Nakamura, chairman of the Japan Federation of Construction Contractors, asked for understanding for expected increase in costs arising from improving the benefit of skilled workers when he met Keiji Kimura, chairman of the Real Estate Companies Association of Japan, last autumn. The meeting was the first between the head of the construction industry with his counterpart in the real estate business.

     Foreign workers working in Japan under the Technical Intern Training Program may also be one of the solutions to the shortage of such labor in Japan.

     In summer 2012, Masuyama Steel Construction in Toride, Ibaraki Prefecture, hired Nguyen My Xuan from Vietnam under the government-backed Technical Intern Training Program. The factory has been so busy recently that it has had to decline some orders.

     The 37-year old Xuan sends part of his monthly salary of roughly 180,000 yen ($1,743) to his wife and children back in Vietnam.

More applicants

According to senior managing director Hiroi Masuyama, Xuan is more eager to learn the trade than young Japanese workers. Xuan is also pleased, because he can earn more than he would in Vietnam, in addition to being able to acquire sophisticated steel processing skills. However, as the maximum term of the training is three years, he has to return home in about a year and a half.

     In Japan, there are roughly 15,000 foreign technical interns like Xuan working in the construction industry under the program. The scheme was originally established to provide technological support to emerging countries. However, trainees came to be valued as a precious labor source that supplements the shortage of younger Japanese workers.

     As a result, the government started mulling ways to ease regulations, such as extending the training period from three to five years as an urgent relief measure to supply enough workers for the expected construction rush in preparation for the 2020 Tokyo Summer Olympic Games.

     According to the Japan International Training Cooperation Organization, which supports the program, the number of applicants for training lasting two years or longer in the construction industry in fiscal 2012 has increased by 25% to 4,595 from a year ago. The number of applicants for April to December 2013 has also increased by 19% on a year-on-year basis.

     Kenji Yumoto, vice chairman of the Japan Research Institute, said that construction starts in Japan have already reached a peak. According to Yumoto, the industry needs to urgently discuss fundamental actions to secure labor, including employment of foreign workers amid the shrinking labor pool in Japan, because wider use of foreign technical interns is only a temporary relief. Masuyama Steel Construction aims to hire two new workers in preparation for the future when skilled workers may become a rare commodity.

You have {{numberReadArticles}} FREE ARTICLE{{numberReadArticles-plural}} left this month

Subscribe to get unlimited access to all articles.

Get unlimited access
NAR site on phone, device, tablet

{{sentenceStarter}} {{numberReadArticles}} free article{{numberReadArticles-plural}} this month

Stay ahead with our exclusives on Asia; the most dynamic market in the world.

Benefit from in-depth journalism from trusted experts within Asia itself.

Try 3 months for $9

Offer ends September 30th

Your trial period has expired

You need a subscription to...

See all offers and subscribe

Your full access to the Nikkei Asian Review has expired

You need a subscription to:

See all offers
NAR on print phone, device, and tablet media