Tuesday, September 12, 2017

On the labour shortages of Sarufutsu, Hokkaido


Late last month, I came across Masahiro Hidaka's Bloomberg article "Japan's Richest Village Can't Find Workers for Its Factory". In this article, Hidaka describes how the village of Sarufutsu, northernmost village in Hokkaido and thus all Japan, is facing a shutdown of its hugely profitable scallops fishery because it is literally running out of workers.

The village -- which is closer to the Russian island of Sakhalin than Tokyo -- boasts some of the highest average incomes of any town in Japan, thanks to the earnings of some of the fishermen. But the new scallop factory isn’t running at full capacity because it can’t get enough workers for lower paying but important jobs.

It’s a problem for the economy as a whole because it shows that some industries may not survive as the population ages and shrinks, even if they are profitable.

The scallops from the nearby waters are dried and then mostly exported to Hong Kong and elsewhere as a premium ingredient in Chinese food. By value, scallops are the biggest international export from Hokkaido. But the workers in the factory are mostly older women, and in about seven or eight years, there won’t be any more Japanese working there, according to Koichi Kimura, an executive of the fishing cooperative that runs the facility.

"If we wanted to we could run 24 hours a day and triple production," says Kimura. "But we would need more than 100 new people for that."

The village’s population isn’t shrinking, but it’s flat, and while the factory employs 19 Chinese trainees among its 90 staff, it can’t legally increase their numbers without adding more Japanese employees. So the village authorities are trying to encourage people to move to the town.

[. . .]

"Young Japanese people aren’t interested if we just raised pay a little," says Kimura. "If we were to double or triple wages, we could attract workers, but we wouldn’t be able to make ends meet."

While economists and the Bank of Japan point to the shrinking population as an opportunity for companies to increase automation and productivity, not all jobs can be done by machines. The 2.4 billion yen ($22 million) new factory was opened in April 2016 with new machinery, but it still requires workers.


(Spike Japan, incidentally, had visited northernmost Hokkaido in one visit. He was impressed by the village's prosperity, but also by its steady emptying out.)

As goes Sarubetsu, arguably as well-off a village as one can find Japan, so too wider rural Japan? I know, from my visits back east in Canada, that some Atlantic Canadian communities in similar situations have managed to avoid problems like this through migrant labour, temporary or otherwise. Is this going to be politically viable? At what point will the economic pain from industries shut down for want of labour overcome the reluctance to engineer shifts, whether through international immigration, a rapid improvement in pay scales that would attract young Japanese, or--perhaps most plausibly--a combination of the two?

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