Japanese Companies Rely on Foreign Labor Amid Labor Shortage

A government survey released Monday shows that 68.2% of Japanese companies hire foreign workers primarily to mitigate a severe labor shortage. This represents the highest percentage since the survey began in 2023 and occurs as the jobless rate hit a one-year low of 2.4% in July.

Sanae Takaichi, the Prime Minister of Japan, has simultaneously worked to tighten rules for non-Japanese residents. Takaichi spearheaded stricter residence visa eligibility and appointed a dedicated minister to address public anxiety and perceived unfairness regarding the growth of the foreign population, which reached a record high of over 4 million in late 2025.

While companies report challenges with communication and bureaucratic visa procedures, nearly 90% of surveyed foreign workers reported no workplace issues. The reliance on overseas labor is driven by a shrinking and aging population, with projections suggesting the ratio of foreign nationals in Japan could rise to 10.8% by 2070.