Why Vietnamese Workers Don't Flock To Japan Anymore

The depreciation of the yen against the Vietnamese dong has also accelerated, and the salaries that Vietnamese migrant workers receive have decreased by at least 10–20%.

“Since the yen's depreciation, it has become difficult to recruit migrant workers to Japan,” says Nguyen Thuy Linh, president of Himawari Service, a human resource service company in Hanoi.

But for some Vietnamese workers, whose average monthly wages at home are currently around US$200-300, Japan - where wages have not increased for 30 years - is still an attractive option.

Based on average wages announced by Vietnam's General Statistics Office and the average wages for technical intern trainees and specified skilled workers announced by Japan's Ministry of Health, Labor and Welfare, the wage gap between Japanese and Vietnamese salaries can be expected to decrease further.

In 2021, the average monthly wage for specified skilled workers in Japan was 9.7 times higher than in Vietnam, while for technical intern trainees it was 8.2 times higher. But by 2025, the average monthly wage for specified skilled workers and technical intern trainees is expected to have fallen to 5.9 times and 5.1 times the Vietnam figures, respectively.

And in 2031, projections say, the average monthly wage for specified skilled workers and technical intern trainees will fall to 3.4 times and 3 times respectively.

It is likely, then, that 2031 will mark a turning point when Vietnamese workers will no longer see Japan as an attractive source of income. The costs associated with migration will no longer be worthwhile as salaries in Japan will only be about three times the local levels.

Living in Japan is costly - about four times higher than in Vietnam, as of 2023. Migrant workers' average monthly salary is around 180,000 yen (about US$1,250) but 40 to 50% of that is taken up by costs of dormitory fees, taxes, social insurance and other deductions.

Specific measures must be taken to ensure the continued flow of migrant labor essential to supporting Japan's economy. The first is to eliminate brokers.

A Vietnamese migrant worker to Japan borrows about 1 million yen from brokers to pay for travel expenses to Japan. That figure is higher than the amount paid by migrant workers from other countries such as Indonesia or the Philippines.

Japan would do well to follow the lead of South Korea, where an employment permit system was implemented in 2006. This eliminates brokers and is directly administered by South Korea's Ministry of Employment and Labor. South Korea has not only eliminated brokers but also allows migrant workers to change jobs in the same industry under certain conditions.

The second improvement would be to recognize technical intern trainees and specified skilled workers officially as“migrant workers .” This may provide improved outcomes and treatment for migrants whose staas“trainees” may lead employers to abuse their own superior staand force them to work for lower wages.

The third measure relates to skills capacity among migrant workers after they return home. For technical intern trainees and specified skilled workers, the fois on having them work in Japan, not on how they will use the knowledge and skills they have acquired after returning to their home countries.

Except for a few willing companies, there is almost no assistance provided for job placement or further development when a worker returns to the home country.

If workers who learned skills and knowledge in Japan can be hired in local factories, and if the Japanese and Vietnamese governments jointly create a national qualification that is accepted in Vietnam, the lives of workers after returning home can be significantly improved.

Even if wages are a little lower than in other countries, the numbers of Vietnamese people who want to study technology in Japan will increase if the conditions are more enticing.

Atsushi Tomiyama is the principal economist at the Japan Center for Economic Research and a lecturer at Tama University.

This article appears in the most recent edition of East Asia Forum Quarterly ,”Re-defining the ASEAN–Japan Relationship ,” Vol 15, No 3 and is republished under a Creative Commons license.