The coming labour shortage?

by Chris Bertram on December 8, 2010

I’ve been reading Doug Saunders’s excellent Arrival City this week. Full of interesting and enlightening facts about migration, about how cities work, about international development. One page, however, brought me up short, so this is a bleg aimed at economists and especially at labour-market economists. Saunders argues (pp.88-9 for those who have a copy) that increased migration of unskilled labour will be a persistent feature in Western economies “during this decade and throughout the century” because of the demographic pressures in those ageing societies. With reproduction rates falling below 2.1 and the proportion of elderly people in the population rising, immigrants can compensate for labour shortages. “… while immigration is not a mandatory solution to labour shortages, the combination of cash-starved governments and higher demographic costs will make it the least painful and most voter-friendly solution.” He then reels off a series of labour-shortage estimates (US to require 35 million extra workers by 2030, Japan 17 million by 2050, the EU 80 million be 2050, Canada 1 million short “by the end of this decade.”)

Now I know that some of those dates are 20-50 years in the future (and maybe that’s my answer) but the idea of western economies suffering labour shortages at the bottom end does sound surprising. After all, those countries contain not-inconsiderable unemployed, underemployed and, in once case, incarcerated native labour populations at the moment. And the domestic working classes of those countries are fond of complaining that all the jobs have gone to China. So is there a contradiction here? Or a paradox? If the claim was about a shortage of specific skills, I could understand it better, but it isn’t. I’m not sure I buy the claim about “voter-friendly” either. If there is a labour shortage then isn’t there an opening for voter-friendly nativist parties that keep migrants out so as to bid up domestic wages? A worrying thought. So economists, demographers – please help out a benighted philosopher.



Pete 12.08.10 at 4:16 pm

Shortage of low wage labour. Otherwise they might have to increase the wages of people doing physically demanding / long hours / degrading work to compensate for those disadvantages.


MPAVictoria 12.08.10 at 4:42 pm

Bingo Pete. The working class in Canada (and I assume the other developed nations) want a living wage for there labour. Hopefully demographic changes can help facilitate this.


MPAVictoria 12.08.10 at 4:44 pm

there = their


Tim Worstall 12.08.10 at 5:00 pm

“increased migration of unskilled labour will be a persistent feature in Western economies “during this decade and throughout the century” because of the demographic pressures in those ageing societies.”

A possible outcome, certainly: as is ever greater automation.


mike 12.08.10 at 5:10 pm

Young educated Irish will be like gold dust around Europe as the effects of the low birth rate amongst Europeans is felt in the coming years. If I could buy them and store them for a few years I would be confidentr of getting my money back.


cyn 12.08.10 at 5:17 pm

“… while immigration is not a mandatory solution to labour shortages, the combination of cash-starved governments and higher demographic costs will make it the most painful and most voter-friendly solution.”

Should that be “the most *painless* and most voter-friendly solution”?


y81 12.08.10 at 5:19 pm

What cyn said, although I was going to suggest “least painful.”


Doug Saunders 12.08.10 at 5:29 pm

Thanks for the post on ARRIVAL CITY, Chris. Labour shortages are almost always a factor when you have economic growth and demographic shrinkage – – You can get somewhere with endogenous growth (ie using productivity gains, technology etc to squeeze more output per worker) but that only works in some sectors and takes you only so far. Also: unemployment and labour shortages don’t always have a direct relationship. You can have high unemployment and large labour shortages if there’s low labour mobility (especially in large federal countries) or if there are sectoral issues. At the height of the crash, in 2009, both Australia and Canada had large labour shortages in the hundreds of thousands. The Merkel government in Germany, despite its current anti-immigrant sentiment, acknowledges it’ll need at least 400,000 immigrants per year to even begin to fill labour shortages. David Cameron’s attempt to cut immigration levels by 10 to 15 per cent met such fierce resistance from business lobbies this years – – who face hundreds of thousands of shortages despite a high unemployment rate (by UK standards) – – that he scrapped it in all but name. Yes, you can raise wages for unskilled work in an attempt to attract more skilled unemployed workers to “down-skill,” and that will work (and is morally advisable) to a point – – but it very soon starts pushing up unemployment rates because at a certain point it chokes off hiring and slows the economy. Within any workable margin, you’re still going to have labour shortages if there’s growth. Again: You’re all suggesting useful alternative options, but large-scale immigration has been the path of least resistance for governments during the past five decades, and given the even higher costs of alternative options today, I don’t see governments (except perhaps Japan, which has opted for endogenous [non-]growth and a reduced standard of living) pursuing anything different. As I write: We ought to plan for what *will* happen, not what ought to happen.


Chris Bertram 12.08.10 at 6:44 pm

“least painful” is correct – sorry about the mistranscription.


Chris Bertram 12.08.10 at 6:49 pm

Many thanks for dropping by Doug. I wasn’t thinking so much about skilled workers downskilling but about the existing reservoir of unskilled unemployed in countries like the UK. There’s not a few of those – ditto in many other countries (Spain perhaps). In the UK, unskilled migrants are currently doing a lot of jobs that British workers won’t do (or won’t do well) such as picking vegetables in Lincolnshire. Presumably there is some combination of either higher wages or unpleasantness of unemployment (a key policy goal of the current government) that would change that?


Doug Saunders 12.08.10 at 7:11 pm

Chris, you’re correct in theory, but it’s very hard to make that work in practice. The biggest experiment I’ve ever seen in testing that idea is taking place in Britain right now. There’s pretty high unemployment here now, mainly among the unskilled, uneducated white working class; there are also large labour shortages in many unskilled fields. The Tory-Liberal coalition government is trying to narrow that gap – – in an effort to avoid using immigration as the solution – – by ending unlimited free public housing, slashing welfare, cracking down on disability benefits and making unemployment insurance (job-seekers’ benefits) conditional on taking the first job that comes along. That’s the way governments attempt to fix this problem: By making it very expensive and humiliating to be unemployed, to the point that any job seems a better alternative. Some economists believe this worked in the United States in the 1990s (though I suspect that a combination of huge economic growth and modest population growth were the root cause).. Employers hate these measures: They find the kinds of workers produced, who are resentful and hate what they’ve lost, are not as productive as immigrants, who have a social-mobility plan and middle-class aspirations that tend to make them more productive right from the beginning. Again: It could work, but it’s not what I’d bet on being the long-term plan.


MPAVictoria 12.08.10 at 7:52 pm

I think people would be happy to do those things if they paid a living wage. They currently don’t.


Chris Bertram 12.08.10 at 8:09 pm

@11 I don’t disagree, although, as I said, the current UK government wants to make the alternative unpleasant.


piglet 12.08.10 at 8:36 pm

The idea that labor shortages will be a major concern in societies with low birthrates (but high productivity!) is nonsense. It’s a pet idea of a certain school of thought that is stuck in 19th century “demographics as fate” ideology (see Joel Kotkin for a truly bizarre example,, and of right-wingers ideologically opposed to social insurance.

Let me point out one data point. In Japan, the bogeyman of an aging society, currently about 64% of the population are of working age. In 1950, that number was only 60%! In 2050 the proportion is projected to decline to 52%, only a bit lower than back in the times of population growth. During those 100 years, productivity will have multiplied, by how much? At least one, perhaps two orders of magnitude I guess. To claim that the decline of working age population from 60% to 52% is among the biggest problems our plundered, polluted, heating planet might face in the next 50 years is positively insane.


piglet 12.08.10 at 8:47 pm

Doug Saunders, those claims about labor shortages are scare propaganda from business groups who want cheaper labor. This is such an old story. Most of us with experience in the IT sector have stories to tell about how the same companies crying “skilled worker shortage” received dozens of applications for each actual job offer, and often were uninterested in paying moderate training expenses for qualified applicants. There’s myriad of evidence how US employers abuse the H1B system to squeeze wages. See Unfortunately this is fodder for the anti-immigration people but nevertheless it is true.


piglet 12.08.10 at 9:00 pm

Incidentally I collect gems of demographic hysteria. I’m always happy to find new ones.

“The building blocks of Japan’s future are collapsing, in the view of many economists.
Japan has fewer children and more senior citizens as a percentage of its population
than any country in recorded history, but the government does little to encourage
childbirth or enable immigration.”
Washington Post, February 3, 2010

“For three years running, South Korea has had the world’s lowest birthrate… The no-husband, no-baby trend has become a demographic epidemic in East Asia… Collapsing birthrates are alarming East Asian governments, which in coming years will face a demographic crunch as the proportion of pensioners rises and the number of working-age adults declines.”
Washington Post, March 1, 2010

“Germany also faces a demographic challenge, managing a population that is not only graying but shrinking. Last month the government announced that the population dropped below 82 million for the first time since 1995. That means fewer people trying to pay off a growing national debt, with a projected budget deficit of $118 billion this year.”
New York Times, February 11, 2010

“We are living in an age of reverse-generativity. Far from serving the young, the old are now taking from them. First, they are taking money. … the federal government now spends $7 on the elderly for each $1 it spends on children.”
David Brooks: The Geezers’ Crusade,
New York Times, February 1, 2010

“Projections of China’s economic growth seem to shortchange the country’s looming demographic crisis: It is going to be the first nation in the world to grow old before it gets rich. By the middle of this century the percentage of its population above age 60 will be higher than in the United States, and more than 100 million Chinese will be older than 80.”
Washington Post, February 28, 2010


Doug Saunders 12.08.10 at 9:59 pm

It’s reasonable to doubt projections – – the future is unknowable – – but it’s sufficient to look at CURRENT labour shortages without extrapolating. In Germany, with high growth and high population shrinkage, there is currently a labour shortfall of 986,000 – – that is, 986,000 jobs that can find no takers; this is despite raising the retirement age from 65 to 67 and taking in about 400,000 immigrants a year. That’s 19 per cent more unfilled jobs than at this time last year. This is in a country with high labour standards, decent pay and benefits and a generous unemployment-insurance system. Will this continue to be the case in the future? Well, we do know that 6 million German workers will be removed from the workforce during the next 10 years because of population ageing (something that’s reasonable to project because it can’t be stopped). I could give you similar current numbers for Australia or Canada, to name two other countries currently in growth positions. Again: Yes, there are policies that could be applied in an effort to fill those shortages with existing unemployed numbers, but these are painful and difficult and almost all governments historically have decided to use immigration instead. This includes the US Reagan government and Gingrich congress, both of which ended up increasing immigration despite rhetoric, based on labour protection etc., to the contrary. I feel safe betting on this trend continuing.


Doug Saunders 12.08.10 at 10:05 pm

Also: China’s population shrinkage is a non-mythic factor: The cities of the Pearl River Delta are currently importing African workers in order to fill huge labour shortages (though I should note that these shortages, as I document in ARRIVAL CITY, are also a product of tragic housing and urban-development policies in the region forcing millions of workers to move to the lower-pay cities of the heartland in order to have sustainable housing and savings- -see my case studies of Chongqing and Shenzhen in the book).


Barry 12.08.10 at 10:14 pm

“extrapolating. In Germany, with high growth and high population shrinkage, there is currently a labour shortfall of 986,000 – – that is, 986,000 jobs that can find no takers; this is despite raising the retirement age from 65 to 67 and taking in about 400,000 immigrants a year. That’s 19 per cent more unfilled jobs than at this time last year.”

Doug, do you mean to say that the (say) 25th percentile wages are climbing rapidly in Germany?


Doug Saunders 12.08.10 at 10:21 pm

Labour shortages can help push up low-end wages because labour becomes a seller’s market. That said, in Germany unions are now supporting the idea of a minimum wage (in the past they’ve opposed a minimum wage, arguing that it would push down workers’ earnings; nowadays, the German economy is dominated by medium-sized firms and an informal sector so it makes sense in order to avoid competition for low-wage manufacturing). Wages have climbed slightly though low domestic consumption remains, as we all know, Germany’s big problem, and therefore Europe’s.


Doug Saunders 12.08.10 at 10:29 pm

Oh, and I shoulda said 200,000 immigrants per year come to Germany currently. 400,000 is the number people in government and industry would prefer. That’s my point: Regardless what we think *should* be done, large-scale immigration from the developing world will be a factor in developed countries for the next three decades, until the world population starts shrinking and the dynamics change again.


stubydoo 12.08.10 at 11:10 pm

It is economic illiteracy to expect either labo(u)r shortages or labo(u)r surpluses over a long-term timeframe based on supply and demand factors. While it is possible somewhat for governments to impact the shape of the labo(u)r market with regulations and/or by subsidising (or penalizing) unemployment, the long term effect of supply and demand shifts will be for production patterns to adjust based on the available (human and other) resources.

(the short term is a different story)


Chris 12.09.10 at 1:16 am

If the claim was about a shortage of specific skills, I could understand it better

Not over that long a time frame. If you know now that you’ll need more workers skilled in X in five years, then you have five years to apply the obvious solution. If you know 20 years ahead of time, even the fact that people halfway through their careers may be unwilling to retrain isn’t an obstacle.


happy 12.09.10 at 3:00 am

piglet : as a programmer, I too keep an eye on various shenanigans use to justify ‘skilled migrant progams’ … I think wages did get a little out of hand circa 2000 but the reaction to that has a very long tail… although it doesn’t work as expected, the temptation to use two recent graduates @ $25/hour versus one experienced worker @ $50/hour. Future facing mix & mentor arrangements are also pretty rare.

Tim : automation isn’t the panacea people think. The cost of getting a healthcare/assistance device (for example) on the market is ginormous… relevant standards & certification, lots of insurance, lots of hoops… far easier to employ a low wage, minimum skilled person to do the lugging.


Digestive Tract on Legs 12.09.10 at 3:59 am

Worrying about the population has a long (I won’t say distinguished) history in Britain. The potted summaries of it that I have read indicate that the worries invariably became loudest when the problem was already going away, if, indeed, it was ever there. Dark predictions about low population growth are mostly sublimated angst about losing international political power. (Not enough cannon-fodder! The embarassment!)

Employers are playing on these fears of the elite to try to drive wages down further. So far, it seems to be working.


Randy McDonald 12.09.10 at 4:00 am

And if I can add, it’s quite true that native-born workers really _won’t_ do the sorts of low-prestige, low-paying jobs that immigrant workers frequently do. When there are calls to recruit domestic unemployed, whether in the United States or the United Kingdom, you consistently get low turn-out and high drop-off rates.


derrida derider 12.09.10 at 4:06 am

I’m one of those labour economists by trade, and I reckon studyboo @22 has it spot on. In the long run skill or labour shortages have nothing to do with the number of people of working age. In the shorter term there is a relationship but it is a complex one, with not all the effects running in a single direction.

It’s not that chronic skill shortages won’t exist – skill-biased technological change is likely to ensure that – but that they’ve little to do with population ageing or slower population growth. The sort of calculations that “we’ll need xxx extra skilled workers by 2050” are usually based on crude lump-of-labour mental models. Judging by the “debate” in my own country on this, in fact these calcualtions are often put forward by politically motivated players (ie business wanting cheaper labour) and compliant bureaucrats who should know better.


Digestive Tract on Legs 12.09.10 at 4:17 am

happy at 24 > “… automation isn’t the panacea people think. The cost of getting a healthcare/assistance device (for example) on the market is ginormous… relevant standards & certification, lots of insurance, lots of hoops… far easier to employ a low wage, minimum skilled person to do the lugging.”

Really? A “low wage, minimum skilled person” will do the job variably for 2000-2800 hours per year. If s/he turns up. An autonomous assistance device will do it for at least 7600 hours per year, perfectly consistently. Three minimum wage workers or one machine? Oh, and buy five and you can lose a supervisor as well.

The certification and hoop-jumping costs are large, but I’d be surprised if they were greater than those for a new drug or civilian aircraft.


derrida derider 12.09.10 at 4:20 am

The cost of getting …. [an automated gadget] … on the market is ginormous … far easier to employ a low wage, minimum skilled person to do the lugging. – happy @24

Err, if the minimum skilled person is NOT low wage, don’t you think that would make people keener to use the automated gadget?

Which is one of several big flaws in neoclassical models of the labour market – the substitutibility in the long run of technology for wages means that wages tend in that long run to determine marginal product at least as much as marginal product determines wages. You can easily generate separate “low wage” and “high wage” equilibria with identical skill and employment levels among workers this way.


mclaren 12.09.10 at 5:49 am

Alas, he foolishly neglects the rapid advance of robotics. Martin Ford has discussed this in detail, as has Marshall Brain. See “The Coming Structural Unemployment Crisis” by Martin Ford, and “Robotic Nation” by Marshall Brain. Gastarbeiters are swiftly becoming superfluous.


Tim Worstall 12.09.10 at 11:16 am

“Tim : automation isn’t the panacea people think.”

I don’t think it’s a panacea: it’s not going to solve all and every problem all on its lonesome.

But it’s pretty obviously going to be a pretty big influence over decades or century long periods. For example, as you mention drugs, a drug is a form of automating a medical treatment. 150 years ago the “cure” for a headache was for some comely maiden to bathe your forehead with a damp cloth. Now you take an aspirin, something which costs virtually nothing. We’ve automated, in a sense, headache treatments.


John Quiggin 12.09.10 at 11:41 am

What DD and others have said.


Barry 12.09.10 at 11:58 am

To Doug @ 20: Doug, I’ve seen predictions of labor shortages for a few decades now, in the USA, and I’ve seen maybe three years of actual tight markets. The way I judge things is by wages. As for what government and industry want, industry wants a glut of cheap, pre-trained and experienced workers who are desperate for a job, and government usually wants what industry wants.

Show me rising wages, and I’ll believe.


sg 12.09.10 at 12:35 pm

To add to what piglet said, Japan has very low female workforce participation, and could address the lower ratio of children to adults by incorporating those women into the workforce. They also have a low retirement age (I think it’s 60) and the longest lifespan on the planet (bar one other country, sometimes). They could easily reduce their social insurance costs and increase their labour pool by changing that – even up to 70. The idea that they’re facing a demographic disaster is, I think, western neo-liberal fantasizing.


Randy McDonald 12.09.10 at 3:05 pm

@ sg: It can be increased, sure. Will it be increased? Homo economicus never has existed, I think.


piglet 12.09.10 at 4:39 pm

“It can be increased, sure. Will it be increased?”

Are you kidding? Do you really think that in a case of an actual labor shortage, when 65 year old Japanese get courted by employers to stay in the workforce at good wages and conditions, do you really think there won’t be a sufficient number of takers? A lot of countries are raising the retirement age while there are NO jobs for older workers. We already know that most of these people will end up unemployed until they can finally retire. If that changed due to a real labor shortage and perhaps a change in the attitude of employers, it is hard to imagine that the legal retirement age will be a limiting factor.


piglet 12.09.10 at 4:48 pm

Doug Saunders: “In Germany, with high growth and high population shrinkage, there is currently a labour shortfall of 986,000 – – that is, 986,000 jobs that can find no takers; this is despite raising the retirement age from 65 to 67 and taking in about 400,000 immigrants a year.”

I wonder how you define “labour shortfall”. Of course, at any given moment there will be a number of unfilled positions. That is true even when unemployment is high, and Germ,any currently has its best employment market in decades if the official numbers are to be trusted. The question really is how long those positions remain unfilled. Is there evidence that employers are desperately looking for qualified applicants for months? Are they making an effort to train otherwise qualified applicants for their specific job? Are they willing to employ older workers? As an aside, there has been a change in the employment statistic that removes unemployed workers above 55 I think from the statistic because they are regarded as unemployable.

As to migration statistics, are your figures net migration? Because there was a time not long ago when more migrants left than moved to Germany. This may have changed. Given the relative strength of the German labor market and given that EU citizens can move freely, it would be surprising if there was NOT net migration to Germany. That migration however is not proof of a labor shortage, just proof of relatively better conditions in Germany than in mot other EU countries.


Randy McDonald 12.09.10 at 6:16 pm

“Do you really think that in a case of an actual labor shortage, when 65 year old Japanese get courted by employers to stay in the workforce at good wages and conditions, do you really think there won’t be a sufficient number of takers?”

In some cases, yes. Will these 65 year old Japanese be picking strawberries, or be janitors, or be taking care of the elderly?


shah8 12.09.10 at 7:38 pm

I do think there will be a labor shortfall.

The biggest issue, in the here and now, is that businesses want cheap labor.

The long term issue is that businesses are strip-mining labor. Good labor comes from sane people who were raised reasonably well, good education is a bonus. Labor from people who were raised in a small town outside Ankara>>>>people who were raised in unsafe urban hellholes or permanently economically depressed areas where there is a single-minded focus on social status. Earlier in US history, businessfolk would much rather hire someone off the boat rather than a white underclass southerner. Vicious social politics makes for sullen, underperforming workforces. Making labor cheap means vicious social politics, see where I’m going?

Right now, we are heading into a period where there are lots of workers that will have to reinvent the wheel for many sophisticated tasks, because we’ve been so uninterested in honestly training people or getting a quality product from our schools and universities. That will be a major drag.

Japan’s demographics problem is an issue of social insurance, rather than a direct issue for businesses in general. As a social insurance problem, again, the main issue is that business want to pay little for labor–which means little for the various social insurance networks. You can import labor, yes, but that means competing for labor. Your average worthwhile employee that’s thinking about moving out of their home country altogether is probably going to think about as many option countries as possible. Do you think Japan with it’s leadership’s passive aggressive insistence on permanent disinflation and xenophobic populace is going to attract that much cheap labor worth having? Germany is having problems chiefly because the Turkish economy is doing well, and that is cutting short the number of quality cheap labor heading there who are willing to put up with the crap Germans gives to “guest workers”.

Ooooh, I think there’s an issue here, but it’s going to be vastly wierder than simple-minded people who think there’s too many people around and theorize around that feeling…


piglet 12.09.10 at 8:52 pm

Germany is having problems chiefly because the Turkish economy is doing well, and that is cutting short the number of quality cheap labor heading there who are willing to put up with the crap Germans gives to “guest workers”.

Germany stopped admitting Turkish “guest workers” decades ago. The people of Turkish origin now living in Germany were mostly born there or have been living there most of their lives. Further, as mentioned, people from any EU country can now move freely to Germany (remind me if there are still restrictions on some of the new members).

I don’t think the rest of what you are saying, shah8, is making much sense either.


piglet 12.09.10 at 9:11 pm

Randy McDonald: “Will these 65 year old Japanese be picking strawberries, or be janitors, or be taking care of the elderly?”

Repeat after me: the proportion of Japanese people of working age is projected to be 52% in 2050, lower than what it is today but not dramatically lower. People who make that kind of argument really seem to picture a society without young people. That’s not what’s happening. And look at how much physical, manual labor has been replaced with automation and is still being replaced. True, there are limits to that process, you can’t automate care-giving occupations to a great extent (the strawberry picking, definitely). But there is definitely no reasonable case for any apocalyptic scenarios. Change always requires adaptation, that is true for population growth as well as population decline. There is simply no reason to assume that the adaptions required by decline are more difficult or disruptive than those required by growth. Especially when you are looking at a country that is poor in resources and 10 times more densely populated than the US. What’s wrong with full employment, high salaries, good schools, longevity, high quality housing, and a declining environmental footprint?

“simple-minded people who think there’s too many people around” (shah8): I do not endorse the claim that “there’s too many people around” – there is no meaningful way to define what too many would be. But if it is simple-minded to reject the notion that more is better, that “400 million people can’t be wrong” (Joel Kotkin cited above), and that the laws of physics do not apply to human society, then call me simple-minded.


piglet 12.09.10 at 9:25 pm

As an aside, if “400 million (projected American) people can’t be wrong” (Kotkin), then a forteriori 1300 million existing Chinese people can’t be wrong can they? I just wish you guys would take notice of the bizarre nonsense that is being propagated by a growing wave of demographic apocalypticians. This can’t any more be explained as a mere counter-reaction to Ehrlich’s opposite apocalyptic vision 40 years ago. We are seeing a return to 19th century ideology about cradle wars and demography as destiny. I suggest this seemingly anachronistic tendency is part of a broader movement to rehabilitate Social Darwinism.


shah8 12.09.10 at 10:06 pm

Hmmm, okay, uh…

1) Yes, was wrong about Turkish guest worker. Otoh, are you going to try to argue that Germany does not employ hundreds of thousands of migrant workers, despite official policy?

The “simple minded” conceit was not directed at *piglet*. I cannot stand Ehrlich. However, I think *piglet* has some screws loose. Can’t stand cornucopians either, and that’s straight up people can solve anything language up there.


Barry 12.09.10 at 10:20 pm

shah8, last I heard (warning: I am an American) pretty much any citizen of an EU country has the right to travel to, reside work in any other EU country. I’ve heard of large numbers of Polish workers working in the UK and (formerly) Ireland.

Germany would be easy to get to for citizens of many poorer EU countries, and it’s one of the richest (not counting those countries which are basically PO boxes for money).


shah8 12.09.10 at 10:52 pm

I am an american too. Shit, I didn’t even realize fully just how much the Turkish issue was generated in the 1970s and 1989 before being prompted to read a wiki or two by being informed I was talking out of my ass. I think the rest of what I said there is right, but what an embarrassment.


sg 12.09.10 at 11:25 pm

shah8, if you’re going to include such canards as “passive agressive insistence on disinflation” and “xenophobic workforce” in your description of Japan’s problems, I don’t think you know what you’re talking about. The Japanese are fully aware of the need to change their demographic structure, and they’re coming around to a discussion of workplace reform; none of it has anything to do with xenophobia, but with how they organize their internal social relations, particularly with how they plan to deal with the social insurance issues attached to casual labour; women’s participation in the workforce; and a low retirement age for a very long-lived and hardy generation.

Someone up above asked if the people over 65 who return to the workforce in Japan will be strawberry-picking. The average age of farmers in Japan now is 63, so yes; they will be quite capable of strawberry picking, in fact a large number of retired Japanese choose to spend their days doing exactly that.

I agree with piglet on this. Western interpretations of the “demographic apocalypse” facing the far east are based on smug self-satisfaction. There’s a whole bunch of racist tropes behind it – Asian as robotic worker, Asians as sexually immature or weak compared to the west, jealousy and fear of the Asian economic model and, of course, additionally, the standard neo-liberal scorn for any society that has a strong social insurance system (as Japan has). And, finally, of course, as in most issues related to Japan or Korea, breathtaking and stunning ignorance.


shah8 12.09.10 at 11:49 pm

*sg*, I’ve read about the japanese “lost decade” for a long time now.

Damn straight the leadership is passive aggressive. Mebbe you aren’t grasping the full implications of this, but Japanese export dominance is funded by reducing investment options among the populace. For all of the pain of the constant disinflation and deflation, they didn’t do even the minimum needed to reverse course for ages, and then tried to reverse course (with predictable disaster). Japanese political leadership is completely captured by it’s export industries to the detriment to household savings and any capacity for small businesses to grow internally.

Workplace reform.
Workplace reform


Call me when pervasive gender (especially mothers) discrimination stop, or perhaps, just a nice, governmental, effort beyond some old, stiff, dude hectoring at young women to have more babies (when the Japanese safety network for single moms is…not worth mentioning). The issues with xenophobia are fairly real as any Korean (and western expatriate–There was a really interesting capsule in Gaijin Smash blog about the barriers to employing foreigners) could tell you.

As for that last idea of 63 year old farmers picking strawberries. So bucolic! Farming is not harvesting. I know that boutique tea plantations don’t require that much labor, but no 63yo could possibly manage it even if he *could* hire the local old biddies to pick the leaves for him/her. Strawberries are not less labor intensive than tea!


piglet 12.10.10 at 12:14 am

shah8: “Otoh, are you going to try to argue that Germany does not employ hundreds of thousands of migrant workers, despite official policy?”

You probably conflate several issues here. Germany has a significant population of non-citizen workers of Turkish, South European, and more recently East European origin. There is a lot of racist or at least unfriendly attitude among Germans vis-a-vis these Auslaender. That is bad enough but I don’t think it has much to do with the question of whether there is a labor shortage. Back in the 50s and 60s, there was a labor shortage and by official policy, immigrants from Turkey and Southern Europe were invited to come work in Germany. Since the 1970s, those labor shortages have turned into mass unemployment. Of course Germany is still attractive for many people from poorer countries but as I stated above, that doesn’t prove the existence of a labor shortage. It only proves that poor people tend to move to places where they hope to have better economic opportunities, if they can. Germany makes it as hard as it can for these would-be immigrants but EU citizens have the legal right to be admitted.

Interestingly, as I stated before, a few years ago, more people moved away from Germany than the other way round.


piglet 12.10.10 at 12:18 am

Btw I applaud your new-found self-awareness (“I was talking out of my ass”). May I suggest that you make it a rule to refrain from posting about topics that you are not familiar with?


sg 12.10.10 at 12:35 am

shah8, I’m living in Japan and let me assure you that the “disinflation” you worry about is nowhere near as devastating a phenomenon in life here as it seems from reading the wrong articles overseas. Your claim that businesses can’t grow internally is also quite … strange … from the perspective of someone living here.

Regarding workplace reform, a classic mistake made in assessing gender discrimination – particularly the role of women in the workforce – here is to ignore the importance of overall workplace relations. If a man in a middle management position here can’t get more than a week off for any personal reason whatsoever, why would you think companies would allow maternity leave? You talk about a “nice governmental effort” to encourage women to have children – perhaps you’re not aware of the paid maternity leave built into the social insurance system? Or the baby bonus? The problem here is not a lack of economic incentives, it’s a lack of corporate willingness to support them. And this comes down to workplace reform.

You tell me to “call you when the pervasive gender discrimination stops”. You might note that I mentioned above the low women’s participation rate, do you think I’m not aware of why that might exist? See the previous paragraph for more info. This can be changed through workplace reform – currently, a lot of women in Japan are waiting to marry so they can stop work.

Finally, regarding xenophobia. I’m well aware of the barriers to employing foreigners, but I work in a university where the foreigners are paid more than the local staff, and where the foreign students all seem to do perfectly well in their shukatsu (job-hunting) with Japanese firms. Here’s a tip for you: don’t believe anything you read from gaijin in Japan. I could tell you stories… xenophobia is a very strong word and what’s going on in japanese workplaces is much, much more complex than that. For example, if you can find me a British or American company that employs illiterate people to do important jobs then please, do tell. To all intents and purposes, most foreigners in Japan are illiterate, and – in case you haven’t noticed – this is a significant barrier to employment everywhere in the developed world. If when you visit Japan you can’t read a menu, ask yourself how you could work in a restaurant? How is Japan going to employ foreign nursing staff if they can’t read even the most basic medical charts?

Regarding strawberry picking, you misunderstand. Have you ever visited the Japanese countryside? When I said farmer, I meant farmer, not farm manager. You can see them in any spring or Autumn day, bent double in the fields at 70 planting rice by hand, or harvesting pears. Yes, also strawberries. Much of Japanese rice-farming is still very labour intensive, and is done entirely by hand. I have a colleague whose mother-in-law is running a mandarin farm of 500 trees herself at the age of 60 or 65, without any seasonal labour of any kind. So yes, in fact, strawberry picking.


shah8 12.10.10 at 12:44 am

Labor issues? I *am* rather familiar with them. Which is why I spoke off the cuff, to my detriment. I knew enough to look stupid, so to say…

You, otoh, are being…excessive in your…zeal. I don’t play the face game. I don’t get het up with admission of faulty knowledge. Moreover, a pleasant civil space is not maintained with a King of the Hill conceit, eh? Trolls would be fecund, no?

In any event, I’m given the impression that you don’t have any more expertise than I do, and the sum of your words suggests that were I to take this seriously, I’d wipe the floor. There is absolutely no need for me to be anything but generous. After all, I could be wrong, and you’d be the one to wipe the floor, no?


shah8 12.10.10 at 12:45 am

*sg*, you sound like TwoFish.


sg 12.10.10 at 12:59 am

I don’t know what you’re talking about, shah8. Are you saying my form of prolix is not original? I’m disappointed.


Charles St. Pierre 12.10.10 at 3:08 am

We probably have a labor shortage here in the US. It’s just that our economy is so dysfunctional we can’t get the labor to the jobs that need doing. And so labor sits idle. For instance, in New Jersey there’s a tunnel (that’s been started) everybody says needs doing, but we can’t raise the money for it. So we have thousands of unemployed. Infrastructure galore, that won’t get repaired because we ‘don’t have the money to build it.’ A massive trade deficit, and resultant millions unemployed, who would be employed if trade were balanced.

Public education seems to suck, and the costs of higher education are skyrocketing, which is going to squeeze off the supply of skilled and management types.

Meanwhile we have the richest rich of anywhere. We have a shortage of limo drivers. We have a shortage of doctors, because way back when they said there was going to be a surplus, and the AMA is a cartel.

Austerity is going to free up a lot of labor, and even more things that need doing, won’t get done.

But do read Martin Ford, (referred to above) over at The issue seems to be whether we make it to the energy future, or choke on our outdated and reactive institutions.


praisegod barebones 12.10.10 at 6:14 am

Labor from people who were raised in a small town outside Ankara>>>>people who were raised in unsafe urban hellholes or permanently economically depressed areas where there is a single-minded focus on social status.

shah8: sorry to pile on here, but it looks as though you don’t know all that much about Turkey either. There may be some parts of Turkey that are ‘permanently economically depressed’ – thought the Turkish economy is currently doing rather better than you might expect – partly, I suspect, because the mortgage market was, by European and American standards, rather underdeveloped. But it wouldn’t be ‘small towns outside Ankara’.


shah8 12.10.10 at 6:58 am

No worries, mate.


piglet 12.10.10 at 6:25 pm

“We probably have a labor shortage here in the US.”

Very funny. Am I missing a hint of irony floating around somewhere?


shah8 12.10.10 at 6:32 pm

It’s possible to be fat and malnourished, too.


Tim F 12.11.10 at 12:37 am

Good news! Both oil and coal will probably hit their peak within five years. After that there will be no cheap, ubiquitous energy source short of burning wood. Modern agriculture is a process that turns oil into calories.

Population growth estimates are therefore most likely somewhat off. Among other predictions.

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