Pandemic opens doors to switch jobs in Japan

 

The Covid-19 pandemic has unexpectedly helped Japan’s nursing homes and information technology (IT) companies overcome years of labour shortages, as job cuts at restaurants and hotels have prompted workers to look for new careers.

 

This newfound job mobility marks a shift in a country whose rigid labour practices are partially blamed for a long term decline in productivity.

 

But it is too soon to say whether the change will ultimately lead to higher wages, which are desperately needed to revive demand and growth in an economy that is still struggling to break free from decades of deflation.

 

For now, the job-hoppers tend to trade one low-paying career for another.

 

Mr Toshiki Kurimata, who used to make 2.8 million yen ($25,000) a year as a masseur, quit after 12 years as the pandemic caused a sharp drop in customers. Now he works at a nursing care centre and is taking classes to become a registered caregiver.

 

With that qualification, he expects to earn around 3.3 million yen – an increase of about 18 per cent. The even bigger attraction, he says, is job stability.

 

“I like working in nursing care and it’s stable,” Mr Kurimata said. “There aren’t age limits on the work and you can find work even if, like me, you are inexperienced.” Experts aren’t sure whether the job-switching will remain limited to certain industries or become a broader trend.

 

It is also uncertain whether job switching will continue once the pandemic dies down, although anecdotal evidence suggests people will keep leaving food-service jobs for nursing and IT.

 

Japan expects to have a shortage of 690,000 care workers by 2040, a tough gap to fill given the rapidly ageing population.

 

Organisation for Economic Cooperation and Development (OECD) data put Japan’s hourly labour productivity at $47.9, making it about 60 per cent of the United States’ level, the worst among the Group-of-Seven advanced economies, and 21st among the 37 OECD members as at 2019.

 

And the prospect of people being stuck in low income jobs poses a big challenge for Japan’s new Prime Minister Fumio Kishida, who has pledged to bring more wealth to households via higher wages.

 

“Covid-19 fallouts are pushing low-paid workers into even harder situations with little, or no, increase in pay,” said Hisashi Yamada, senior economist at Japan Research Institute.

 

Hospitality businesses have laid off workers, with the number of employees falling to 3.9 million last year from the prior year’s 4.2 million, labour ministry data shows.

 

By contrast, the medical and health industry saw employees hitting 8.6 million, up 200,000 from 2019. The IT sector hired 2.4 million employees, up 100,000 from 2019.

 

Vocational training schools have benefited. Samurai, which offers IT training, had 1.7 times more students enrolled as at April this year compared with a year earlier, as employees retrenched during the pandemic rushed to retrain.

 

Most IT jobs on offer for inexperienced workers are for programmers, on the lowest rung of the IT ladder, but they generally still pay more than can be earned in hospitality.

 

The average annual salary for employees at restaurants and nursing homes amounts to roughly 3 million yen, 30 per cent less than an average Japanese workers’ salary, government data shows. IT programmers earn close to the national average.

 

“I saw how popular the IT sector was and thought I may land a stable job,” said 22-year-old Koki Shimizu, a student Samurai who lost his job as a chef and now is learning to program.

 

At Crie, which offers training in nursing care, classes that were only two-thirds full before the pandemic are now packed out.

 

The company’s head Takayuki Nakayama expects the uptrend to continue given steady job offers in the nursing care industry.

 

“It’s true wages are relatively low in the nursing-care industry. But many job-seekers want stability after seeing the damage inflicted on eateries and other service-sector firms.” Retailers are also becoming alarmed over losing staff, as they are counting on a rebound in activity as Japan gradually eases Covid-19 restrictions.

 

Major Japanese pub chain operator Watami is scrambling to hire 100 mid-career staff this year – something it has not done for three years – and it reckons that eventually it may have to pay more.

 

“1,000 yen per hour may not be enough, 1,500 yen may be needed to attract workers in the future,” said the company’s chief executive Miki Watanabe.

 

For now, firms are wary of raising pay as the economy is still struggling in the wake of the pandemic.