The job market in Tokyo
Japan currently ranks as the fourth largest economy globally, behind the US, China, and Germany. Economic indicators are positive, with diverse job opportunities and a low unemployment rate of 2.4% by January 2024. Amidst concerns over rising prices and social issues, Tokyo-based companies are considering wage increases in fiscal 2024. Meanwhile, labor shortages in the capital city create openings for job seekers across different industries. Keep reading for valuable information on Tokyo's job market.
Tokyo's economy
Tokyo is a hub for various economic and social aspects, not just politics but also businesses. The living infrastructure is well-developed, making it convenient, and attracts people from across Japan and around the world, drawn by its economic opportunities and vibrant culture.
The population had surpassed 14.1 million by January 2024, which is over 10% of Japan's total population. The number is steadily increasing, unlike the rest of Japan, where it is declining. During the day, the population reaches nearly 17 million due to people commuting from other prefectures for work and school.
With such a large population, the economy is also massive. It is the largest in terms of both labor supply and consumption demand. Tokyo's GDP in fiscal 2020 was around 109.6 trillion yen, which is over 20% of the nation's GDP. This is comparable to the GDP of countries like Indonesia and the Netherlands.
The labor market in Tokyo is also highly competitive, especially in finance, technology, and professional services.
The Tokyo Metropolitan Government implements various policies and strategies to attract investment, support economic growth, and improve the quality of life for residents. These may include initiatives to help small and medium-sized enterprises, promote tourism, invest in infrastructure, and foster innovation.
Labor force status in Tokyo
The unemployment rate in Tokyo by December 2023 was 2.1, lower than the national average, reflecting the city's dynamic economy and diverse employment opportunities.
The job openings-to-applicants ratio in Tokyo by December 2023 was 1.74, down 0.03 points from the previous month. The employment situation is slowly improving, but it's essential to monitor the impact of rising prices on employment.
The number of new job openings was 126,495, up 2.5% from the same month last year. Sales have been higher than the previous year for 28 months in a row. Sales increased in five out of nine industries, with lifestyle-related services and entertainment up by 37.2% and medical and welfare up by 13.2%.
There were 37,256 new job seekers, a 2.8% increase from the same month last year, marking the second consecutive month of growth [source: The ratio of job offers to applicants in Tokyo 2023 - MHLW (Japanese)].
Wages in Tokyo
Companies must annually implement measures to increase the minimum wage, which is typically reviewed and adjusted every October. The Central Minimum Wage Council establishes a guideline for the increase, and then each prefecture's local minimum wage councils compile the outcomes. In 2023, the minimum wage in Tokyo was 1,113 yen per hour.
According to a recent survey by Tokyo Shoko Research, 82.5% of companies in Tokyo intend to raise wages in fiscal 2024, marking the highest percentage since 2016, amidst concerns over rising prices and social issues.
When examining the data based on company size, large companies show a higher percentage of 91.7%, whereas small and medium-sized enterprises stand at 80.9%.
When asked about the necessary steps to implement a wage increase, the most common response (66.8%) was an "increase in unit prices of products and services".
Most promising fields in Tokyo
Labor shortages in Tokyo can be observed in sectors such as hospitality, construction, healthcare, information technology, and skilled trades. These shortages present opportunities for job seekers looking for work in Tokyo, both domestic and foreign, particularly in specialized or niche fields where demand outstrips supply.
Vacancies are available in emerging technologies:
- IOT (Internet of things), or the Internet of objects: this is all about connected objects; objects using the Internet to enhance real life;
- E-commerce, online games, mobile applications;
- IT, web development, artificial intelligence, engineering, cybersecurity.
Therefore high-tech sectors are the most targeted. Even though it's easy to find a side job, “baito”, finding a stable job is a more difficult task. In a competitive labour market, the expatriate should show his worth: speaking Japanese is not considered as being an advantage; it is compulsory. Even if you choose to work in an international company, it's important to speak Japanese.
You will definitely have outstanding job opportunities if you accumulate diplomas and work experience. Once again, the company will ask itself why it should hire you rather than hire a Japanese. A solid background and high qualifications are a guarantee of your capabilities. Japan favours high diplomas, and brilliant careers (renowned university, large company). Expatriates will also find work in the educational sector. There is a demand in language schools to teach English and French. Note that, very often, recruiters want the language to be taught by native speakers.
Students seem keen to learn English – which is the first commercial language. There are, therefore, more English teachers in Tokyo.
Part-time work in Tokyo
To cope with the various economic crises, Japan has opted for flexibility. Allowing companies to easily hire and fire helps them increase their productivity, but this flexibility has contributed to the creation of a dual market: on the one hand, permanent contracts (long-term basis) with career development prospects and on the other, precarious employment “baito” or “arubaito” (from “arbeit” – German for labor) subject to market pressure. This is the hidden side of the labor market.
“Freeter” (furiitâ, Japanese pronunciation)
The term appeared in the 1980s with a positive meaning: it refers to those young people who choose to work when they want to. They are free, keeping away from the rigid straightjacket and the model of the salaryman, committed to his company, accumulating over time.
Soon, the term “freeter” lost its original meaning. It is not so much freedom that pushes workers to accept baito, but the difficulty in finding a stable job. This is the irony of employment in Japan: part of the population escapes precariousness. The other one accumulates irregular jobs with no career development prospects.
The “baito” is not only the prerogative of young people. For them, it remains a good way to discover the labor market while earning money. As they grow up, they will work and thrive in a “real company”. Part of them will work to earn money and silently fight for Japan's survival.
The baito is almost like a double punishment because it is still discredited in Japan. It is considered a side job, which you have to stop doing to really integrate into society. Then, how can we consider the thousands of adults in precarious situations? Since 2015, in the private sector, these employees on shaky contracts have accounted for more than 40% of the labor force (figures from the Japanese Ministry of Health, Labour and Social Affairs).
Women and the elderly are particularly affected by the labor market's instability. These women stopped working when they started building a family; even if there are changes – notably a questioning of the dominant family model – the practice remains. When these women return to work, it is most often on a part-time basis. Women raising children alone are even more vulnerable.
Old people also have precarious jobs: taxi drivers, supermarket workers, housekeepers, etc. These “little jobs” help them ensure daily life. In Japan, one out of five seniors is still working. The main reason for this situation is the low level of pensions. It is estimated that 19% of them live below the poverty line.
In 2018, the Prime Minister addressed himself directly to senior citizens, particularly civil servants: life expectancy is increasing (83 years on average), so the retirement age is being raised to 80. For the time being, the measure only applies to volunteers. The legal retirement age remains 60.
However, almost no one retires at this age: the salary drops, on average, by 30% if you decide to leave at the legal retirement age. Other procedures aim to gradually raise the statutory retirement age to 65 for all employees. In the beginning, this would apply to men only. Ultimately, some believe that the legal retirement age will be raised for everyone to 70 years or more.
The government also proposed measures in 2016 to improve the working conditions of the most vulnerable workers because working in baito means having less social security coverage than ordinary employees. Less social protection means, therefore, less insurance and, in the long run, a low pension. The government's idea is that the rights of an employee in baito must be the same as those of a regular employee. The future will tell whether these measures will help to halt the precariousness of the labor market.
Understanding the duality of the Japanese labor market will help you develop your own career plan. The languages spoken (Japanese, English, fluent, even business), expertise, diplomas, and your network will enhance your potential to the fullest. It is entirely possible to work in Japan, especially when you have a skill set that will impress recruiters.
Useful links:
Monthly Tokyo industry/employment statistics
Tokyo Industry and Employment 2023 (Japanese)
