Japan Faces a Looming Labor Shortage of 1.9 Million Workers


According to an article in the magazine “Nikkei Computer,” Japan is expected to face a shortage of 1.9 million workers in the future.

From the perspective of the labor population, there will be a decrease of 22.8 million due to retirements based on age. On the other hand, new hires will add 17.8 million, and an increase in labor force participation, including housewives currently not working and extending the retirement age of retired senior workers, will add 2.5 million. This results in a total decrease of 2.4 million.

On the demand side, the number of workers needed is expected to decrease by about 500,000 due to the use of DX (digital transformation) and AI.

Therefore, while the labor population will decrease by 2.4 million, labor demand will decrease by 500,000. The net shortage of workers will be 1.9 million.

Nevertheless, a shortage of 1.9 million is an enormous number. While it is important to create an environment that facilitates labor participation, it is hard to imagine that this alone will cover the shortfall.

Efforts to further reduce labor demand, such as promoting the use of DX and AI, are also essential.