Terrie’s Take on how Japanese companies are too “addicted” to cheap Chinese “Trainee” labor to hire unemployed Japanese


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Hi Blog. Received this this morning from Terrie Lloyd. Very much worth reading, as it shows the damage done by the market aberration (if you believe in free markets as the final arbiter of fairness) of holding labor costs artificially low — you get resistance to ever raising them again once business gets used to those costs as being “normal”. As wages and working conditions in Japan continue their race to the bottom, it seems that two decades of NJ “Trainee” near-slave and slave labor will come back to haunt the Japanese economy after all. Arudou Debito

* * * * * * * * * T E R R I E ‘S T A K E * * * * * * *
A weekly roundup of news & information from Terrie Lloyd.

General Edition Sunday, June 19, 2011, Issue No. 618
Addicted to Chinese Trainees, e-biz news from Japan
Date: June 19, 2011 11:49:26 PM JST

According to an article in the Japan Times on Thursday,
quoting numbers from a Labor Ministry report released
earlier in the week, there are now 2.02m people in Japan
receiving welfare checks, more than any time since 1952.

“Welfare” in Japan is apparently defined as financial
assistance offered by the government to a household when
its total income falls below the national minimum.

Presumably a big contributor to this record number of needy
people has been the Great East Japan earthquake in March.
The level of joblessness has soared to around 90% of
employable survivors in the worst hit areas, and by
the end of May about 110,000 were out of work and applying
for the dole at various Hello Work offices in Iwate,
Miyagi, and Fukushima prefectures.

So, one would think that with this excess capacity of
workers, many of whom are from the agricultural, fisheries,
and manufacturing industries, juxtaposed with the
phenomenon of disappearing Chinese trainee workers from
factories around the same regions, less than half of whom
are yet to return, that there would be a slew of local
hirings to make up the shortfall. Certainly after the
Chinese trainees fled the disaster areas, there were plenty
of news reports of employers grumpily saying, “We can’t
trust Chinese employees, next time we’ll hire locals.”

But are they following through with local hiring offers?
Our guess is “not”.

The reason is because a Japanese breadwinner from Iwate on
unemployment, or even welfare, can still receive 2-5 times
more than the Chinese trainees do for the same jobs. The
factory and farm operators may grizzle about their
“unreliable” Chinese employees, but without this source of
ultra-cheap labor, they have no way of being able to
compete with the flood of goods and produce coming in from
China itself. The fact is that thousands of small companies
all over Japan are addicted to cheap trainee labor from
China and elsewhere, and to go local they would soon go out
of business.

Thus, unless the government comes up with some kind of
subsidy system, the folks in Fukushima will stay unemployed
and the missing trainees will be replaced with new trainees
just as soon as the recruiters in the remoter regions of
China can find them.

We have mentioned before in Terrie’s Take (TT-399 —
Trainees or slaves?
), foreign “trainees” in Japan are paid
a pittance. On average they make about JPY60,000 a month in
the first year, then if they are lucky, around JPY120,000 a
month for the following two years, after which they have to
return to their home country.

One of our readers alerted us to an excellent report just
put out this month by a Hong Kong labor relations think
tank called the China Labor Bulletin. The report is called
‘Throw Away Labor — The Exploitation of Chinese “Trainees”
in Japan’ and is a encapsulation of the appalling
situation involving the virtual slave trade going on
between Chinese recruiters and small- to medium-sized
companies in rural Japan who need this cheap labor to

Get the report at: http://www.clb.org.hk/en/node/101071.
It’s a quick read.

The report chronicles the various miseries that Chinese
trainees experience once they get to Japan, including:
withheld wages, no or very underpaid overtime, withheld
passports, threats of law suits if they flee back to China,
unsanitary living conditions, extremely difficult working
conditions… well the list goes on. And of course it’s
debatable whether such trainees actually receive any
education worth taking home with them.

The problem is that when you have poor and relatively
uneducated people from the Chinese hinterland making just
2,000 yuan per month (JPY26,000), almost anything sounds
better than what they have, especially when a recruiter
mentions Japan. The report details how trainees are
inveigled into a contract, and once committed, how they are
locked in to delivering that contract under very harsh (and
real) threats of legal action back in China.

This cheap labor addiction represents the reality of the
Japanese rural labor market. No doubt we’ll see the media
highlighting how locals are landing construction jobs and
getting back on their feet — that makes for feel-good
copy. But with only a comparatively small number of such
jobs going, there may well be a larger number of new
“trainee” visas being issued so as to ensure that
the rural factories and farms stay in business for a while

SUBSCRIBE to, UNSUBSCRIBE from Terrie’s Take at:

http://www.japaninc.com/terries_take, or,


* * * * * * * * * T E R R I E ‘S T A K E * * * * * * * *
A weekly roundup of news & information from Terrie Lloyd.

General Edition Sunday, November 12, 2006 Issue No. 399

Earlier on this month, the Yomiuri newspaper carried an
article about an auto parts manufacturer in Akitakata,
Hiroshima, which is being investigated for hiring more
foreign “trainees” than allowed by the rules. The company
apparently padded the number of its regular employees, so
that it could bring on an additional 3 Chinese trainees
to add to the 3 already working there. The company had
discovered that not only were the trainees able to do the
same work as locals, they are more than 50% cheaper.

While this case may not seem like such a big deal, it is
the tip of a pretty ugly iceberg. The government’s foreign
trainee program, which started with the grand design of
helping to lift the basic skills of Japan’s neighbors, now
appears to have degenerated into being little more than a
pipeline of low-cost laborers to keep struggling small
manufacturers and farmers going.

The trainees work/train under near-slavery conditions and
the fall-out from this seems to be increasing. Last year
alone, 1,888 of them ran away from their postings, many
going on to become illegal workers elsewhere in the
country. Broken down by nationality, they numbered 3,516
Chinese, 2,629 Vietnamese, and 1,498 Indonesians — pretty
much the same ratios as the nationalities being brought in
under the program.

There are about 83,000 trainees accepted into Japan each
year, about 160,000 in total, of which just over 70%
(55,000 annually) are from China. They are allowed to work
(ummm, sorry, “train”) in 62 different types of industry,
such as agriculture, food processing, construction,
apparel, and animal husbandry.

The numbers in agriculture are a particular eye-opener and
foretell labor trends in this country. Young Japanese
really don’t want to work the land and thus there are now
about 9,000 foreign trainees bolstering the sector,
compared with just 2,200 Japanese high school graduates.
That means there is a 4:1 likelihood that next time you
want to buy a daikon or eggs directly from the farm, you’d
better be able to speak Mandarin.

The trainee system has been turned into a form of legalized
“slavery”. Most trainees for the duration of their 3 years
have virtually no employment rights (they are, after all
supposed to be trainees not employees) and are paid
unbelievably low compensation — just JPY66,000 (average) a
month plus accomodation in the first year, and a more
luxurious JPY118,000 (average) or so for the following two
years. Could you survive on this? We’d have problems…

The treatment some of these trainees are receiving is
pretty shocking. The “Association Tokushima”, a group
assisting Chinese laborers with problems in Japan, says
that they have documented a case of a 27-year old female
trainee working for a Tokushima-based food processing
plant, who received just JPY70,000/month for working 8
hours a day, 6 days a week, and an overtime allowance of
just JPY300/hour. Apparently she was working 14 hours a
day, then moon-lighting doing farm work on Sundays.

In another case, covered in the Asahi Shimbun back in
August, a Chinese female trainee arrived in Japan to learn
how to grow spinach and strawberries. But somehow she wound
up in a Forestry company. While there, she was required to
clean the company president’s home and even polish his
shoes. During her first year, in 2004, she received an
allowance of JPY50,000/month and JPY300/hour for overtime.

After she “graduated” from her first year and become a
so-called documented worker, her salary was supposedly
lifted to JPY112,000/month plus overtime. But in reality
the company deducted JPY90,000/month for rent, futon lease
(really!), washing machine lease, etc. To top it all off,
one of her managers had her apartment key and about 4
months into her traineeship started visiting and demanding
sexual services.

Conditions like these came to the notice of the press in
August, when a Chinese trainee at a pig farm in Chiba
complained about the harsh work conditions and was told
that his traineeship would be terminated. This of course
meant that he would be banished back to China — trainees
seldom get an extension unless the sponsoring company wants
them. In despair, he went berserk and stabbed 3 people,
including an official of the Chiba Agricultural
Association, the very organization that had brought him to
Japan in the first place. The official died. Since then,
the Ministry of Agriculture and other trainee
program-related ministries have started to review means of
enforcing the rules of the program that are supposed to
protect the trainees from these types of abuses.

According to the Ministry of Health, Labor and Welfare,
companies accepting foreign trainees and workers are mostly
small-scale businesses with less than 19 employees. There
were more than 180 documented cases of fraud or
mistreatment last year (2005) and it is suspected that a
lot more cases go unreported. In fact a Ministry of Health
survey found that of 731 reviewed companies, a full 80% of
them were violating the minimum wage law and labor
standards law for their 2nd- and 3rd-year trainees.
Obviously the problem is severe enough that the Ministry is
allocating JPY400m (US$3.38m) to its quango looking after
the placement of trainees, JITCO, for the purpose of
monitoring participating companies to make sure that they
stay compliant with the trainee program rules.

With the falling birth rate and migration of the domestic
workforce out of hard labor jobs, Japan clearly has to turn
to foreign workers to keep things going. The government
knows this and is infact planning to expand the trainee
system. Among the proposals are to increase the number of
trainees a company can employ from just one for every 20
staff, to an unlimited number, and to increase the variety
of jobs that a trainee can fill. Some employer
organizations are even calling for rule changes to make it
legal to bring in unskilled foreign workers in the same way
that they can already do with skilled ones.

But the expansion can’t go ahead until someone takes
responsibility for properly protecting the welfare of the
trainees. Although JITCO is being assigned this role, with
the increased number of inspectors, in fact, given that
they are a major player (they account for about 60% of
trainees) in sourcing and matching the trainees, and so it
seems like the current problems are in fact JITCO’s to solve.

Instead, we feel that the government should legislate to
keep traineeships to just one year and make sure that
classes from a local education institution — which need
new students — are incorporated. Once trained, graduates
should be allowed to become regular workers and enjoy the
benefits of a minimum salary, labor rights, and the ability
to get their visas renewed. Those that don’t pass their
first year should be sent home.



Already a step in the right direction is being taken, in
the way that semi-skilled Filippino health care workers are
to be handled. If they pass their language tests and gain
a solid record during their training period they will be
allowed to stay and work in Japan indefinitely…

[Note from Debito: Hah.]

11 comments on “Terrie’s Take on how Japanese companies are too “addicted” to cheap Chinese “Trainee” labor to hire unemployed Japanese

  • Once again, very informative reporting from Debito.org. I always enjoy these type of articles, keeping the light on the darkness that gets swept under the rug so often here. The haters and debito stalkers might disqualify Debito, but how about Terrie? Youll never get anything this informative over at Tepido, the lattest is something about recycling fecal matter into something useful to eat. They know a little about that in reverse. They recyle useful info from here into fecal matter over there.

  • We can only hope that the vast majority of Chinese-uneducated or not-will at least have heard from someone they know about the spectre of nuclear radiation around Fukushima before they sign up to be disposable labor.

  • I’d have to agree with Jim. Tepido specializes in what might be called reverse sewage treatment.

    At any rate, an interesting article. Folks really never consider these variables when generating their panaceas for economic situations, and it’s good to see someone take note of them.

  • One of the key points from Terrie’s article that should be stressed is that Japanese agricultural producers (in this case in Tohoku) cannot compete with cheaper Chinese imports, which is why they have to rely on cheap foreign labour. At this time, hiring local workers does not make economic sense.

    The situation is not restricted to Japan – the US and Canada are obvious examples, as is the EU. It’s a structural problem with the global (first world) food supply. A solution may be to no longer expect to purchase tomatoes in the middle of winter, but until our buying habits change we’re stuck with migrant workers (and migrant workers are stuck with us).

    — Having migrant workers is one thing. Importing people to work as virtual slaves without domestic legal rights as workers is another.

  • beneaththewheel says:

    From what I’ve read, immigration cannot solve Japan’s declining birthrate problem. If the goal of immigration was to sustain the population, it would need to be tens of millions of immigrants. The most important thing is to change from an economy depending on lots of unskilled labour (and by extension Chinese trainees) to fewer skilled jobs. Immigration of skilled immigrants can be a part of this, but that’s not rural Chinese immigrants then.

    If argued from a liberal/moral perspective of Japan’s obgliation to help it’s neighbors the argument is different. But Japan relying on trainees is shooting itself in the foot from an economics perspective in my opinion.

    Either way, if they are to use a trainee program, I hope they rid the corruption of it. My old work has a trainee right now, and they are following all the rules which seem very strict. If it truly is a program where people are actually training and learning a skill in Japan while getting paid for it, and can use that skill in their home country for the better, then I think it can be good thing. The corruption is what completely ruins the program. I haven’t read too many books on it, so if this opinion is wrong, I’d love to hear why.

    To address the Tepido comments, Debito is a better activist site than Tepido because Tepido is not an activist site. It doesn’t try to pass itself off as one either.

  • Just a genuine academic question (the treatment in Japan of many migrants is obviously in it’s own right unacceptable): How bad do people feel the situation is in Japan in contrast to other developed nations, is it worse than Mexican migrant labor in the US, or African migrant labor in Spain? I think we can safely say it can’t be any worse than the treatment of migrant workers in the Middle East for example… but is this a global problem or do people think there is something uniquely unpleasant about the way Japanese migrant labor is dealt with?

  • @beneath..
    “The most important thing is to change from an economy depending on lots of unskilled labour (and by extension Chinese trainees) to fewer skilled jobs. Immigration of skilled immigrants can be a part of this, but that’s not rural Chinese immigrants then.”

    True, but when will Japan realize the good times of the 80s and 90s are gone for good? Its still an export economy, and how to reinnovate from that? Well I think HK and Singapore are good examples, but in Lee Kwan Yews writings he actually admires the Japanese and thinks Singapore should adapt Japanese corporate models. Dare I critisize, but I think Lee missed the mark on that one, anyhow Singaporeans are much too individualistic to start with that. Japan could start with economic zones like Korea did and a tax model like HK. Japan has so much to offer and become, its really a shame to see it fall down and continue to wallow in it. Whats it going to take?

  • One caveat about Terrie’s Take is that sometimes you can’t be sure about the numbers he’s putting in the update. I am waiting for him to get back to me on whether the Ginza-based human resources firm Wall Street Associates really sold for $22 million. http://hoofin.wordpress.com/2011/05/30/are-japan-internet-businesses-that-focus-on-expats-not-much-grander-than-blogs/ Terrie said it did, but it turns out that I am, credibly, the major user of their internet site in America.

    I have no doubt that the Chinese worker-trainees are being exploited as cheap labor, then disposed, in near-indentured-servant conditions. You had that confirmation in the German documentary “Sour Strawberries”, where the trainee-broker/slaver set the union activist on fire when he sought to intervene. And it’s typical of the pattern of Japanese labor practices when it comes to the Non Japanese. But I just question Terrie’s “take” on it–that the unemployed Japanese in the region simply refuse to do farm work when they can instead get a meager handout from the J-government. It doesn’t sound like the Japanese I met, who liked to keep busy if even it was for zero yen. In fact, it just sounds like U.S. Republican Party pablum, washed through the Chamber of Commerce in Tokyo. (You know that Terrie’s group is the publisher of the ACCJ Journal now, right?) Point in brief: Who is to know what the actual dynamics of the farm economy are? It certainly must be bad, but I would like to see independent verification of the numbers.

  • Notdelusional says:

    I think this is a symptom of a wider problem, although these workers are the ones who get the biggest shaft.

    When the Americans occupied Japan in the 1950s they brought with them a new “ideal” type of lifestyle, the nuclear family with a housewife. As it was new in post-war America, so it was in post-war Japan. The new tax codes sought to entrench economic support for these families, and housewives eventually got much more economic support in Japan than in the US where this suburbanite ideal originated. The majority of women who stayed in the workforce after marriage ended up being penalized, although the few women earning high wages were not. A combination of women going on to higher education and putting off marriage for longer meant women became more and more skilled, so Japan created a huge underclass (millions!) of skilled married women working part-time hours and never getting raises to stay under the tax threshold. Unskilled men and immigrants couldn’t compete without lowering their prices in the labour market, and that’s how the freeters were born.

    It’s unfortunate that most immigrants who came in at this time, no matter their gender, were then a victim of employers who wanted more out of them than for the small trouble of getting them into the country. I’d say it has roots in the slave labour of WWII but we see this predatory behaviour in employers of immigrants in many other countries, most notably of Hispanic immigrants to the US.

    Basically Japan needs an overhaul of their entire tax system in addition to strictly enforcing labour laws. Instead of cops sitting in kobans drinking tea they should be out making sure farm workers and factory workers clock out at the time they stop getting paid. I don’t want to see the entire trainee system disbanded because it could be a brilliant idea, if it was more about sharing ideas than exploiting the marginalized.

  • Former "Trainee" says:

    Not all “trainees” are from China or other third world countries.

    I graduated with a M.S. degree in Electrical Engineering from an American university and got an internship at a Japanese semiconductor company. I came to Japan on a Trainee visa (研修生). I didn’t do 3K work. I sat at a desk doing chip design. I got about JPY150,000 per month, free lodging in the company dormitory and a commuter pass.

    — Thanks for letting us know. What do you want to say in relation to this blog entry?

  • Former "Trainee" says:

    From reading all the articles about the abuse of the Trainee visa, readers might be quick to jump to the conclusion that trainee visa = indentured servitude visa.

    I simply wanted people to be aware that the trainee visa has been issued for the right reasons. (learning about Japanese business practices, technology, culture by doing non-degrading work inside a Japanese company and being treated fairly). The program that I was associated with was organized by MITI in the 90s, but I’m not sure if it’s still in existence.

    — Clearly you’re ignorant of what’s happening systemwide. I’m glad it didn’t happen to you, but you’re in denial of what’s happening to other people. Do some research within this very blog, as we have for years now. Start here.


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