It’s no secretโJapan is aging fast. With birth rates dropping and the elderly population growing, the situation is already serious. But now, a new factor is making things worse: more young Japanese are moving abroad. This trend is accelerating Japan’s shift toward an even older population, adding to the countryโs demographic challenges.
Seeking new horizons abroad
Data reveal a rising trend: more young Japanese are venturing overseas. In 2023, the Ministry of Foreign Affairs reported a record 570,000 Japanese living abroadโthe highest since 1989. With the economy stagnating and the yen weakening, this shift is likely to continue growing.
So, whatโs driving young Japanese to move abroad? The answer is simple: with wages stuck in a rut and the yen losing value, living costs are soaring. For many, the challenge of starting a career or just making a living at home has become so daunting that theyโre looking for opportunities abroad.
Australia is fast becoming a top destination for young Japanese, thanks to the Working Holiday visa that lets people up to 30 live and work there for a year. In 2023, Australia issued a record 14,398 of these visas to Japanese nationals. With a minimum wage of 21.38 AUD per hourโmore than double Japanโsโitโs easy to see why. For example, farm work in Australia can pay 500,000 yen a month for just 6 hours of work a day, leaving you plenty of free time.
Yes, because money isn’t the only reason young Japanese are moving abroad. Many are fed up with work cultures that squeeze out personal time or hobbies. Add to that low wages, gender inequality, and old-fashioned seniority-based pay, and it’s no wonder they’re chasing a different life elsewhere.
Overall, this trend is not just aging Japan further. It’s also deepening its labor shortage. In 2023, the Japan Chamber of Commerce and Industry found that 70% of 6,000 small and medium-sized businesses were struggling to find workers. With a weak yen and stagnant salaries making Japan less attractive to foreign talent, the situation is only set to get worse.
Stuck in stagnation
“Japanese wages are far from competitive compared to overseas,” explains economist Yuuya Yoshikawa from the Meiji Yasuda Research Institute.
Japanโs real wage growth has been just 0.1% over the past 30 yearsโwhat many call the “lost decades” since the economic bubble burst. This places Japan near the bottom of the OECD wage growth rankings. In contrast, wages in Australia have surged 2.6 times and in Canada 2.2 times over the same period. Although the average annual salary in Japan was 4.58 million yen in 2022, financial pressures make it tough to enjoy a good quality of life.
To make matters worse, Japanโs progress isnโt keeping up. According to a 2023 survey by Indeed K.K., 53.9% of 2,400 full-time employees saw no salary increase. When you add those who experienced a pay cut, the total jumps to 60%.
Gap between expectations and reality
Despite the talk of wage hikes, many are clinging to false hopes. The gap between expectations and reality is glaring. According to Indeed Japan K.K.โs 2024 survey, full-time employees were hoping for a 7.2% raise. The actual expected increase? Just 3.0%. Thatโs quite a reality check.
The situation gets even more complicated when you factor in generational and gender disparities in wage increases. According to NHK, in 2023, male college grads in their late 20s saw a 3.4% rise in basic salary. However, those in their 30s saw no increase at all. For women, the numbers were 1.9% in their 20s and just 0.3% in their 30s. Meanwhile, senior employees in their 60s enjoyed the biggest jumpsโ6.8% for men and a whopping 11.2% for women.
The gaps are wide and worrying. Faced with this reality, many young people are taking matters into their own hands, making the life-changing decision to leave Japan. This, in turn, is leaving the country with social issues that won’t be easy to fix.
Pressure mounts
As mentioned, another factor driving young people abroad is the weakening yen against stronger foreign currencies. But itโs not just the yen itselfโitโs what this means for daily life. With stagnant wages, the weak currency is pushing prices up, making it harder and harder to afford the cost of living.
In 2023, the average living expenses for working households hit 319,000 yen, with food taking up 85,000 yen and transportation & communication around 51,000 yen. Regional differences are clearโKanto tops the list at 338,500 yen, while Okinawa is the most affordable at 245,600 yen. Unsurprisingly, spending rises with age, with people in their 50s having the highest costs. But as we’ve seen, seniors have more to spend, thanks to their bigger wage hikes.
These numbers are a stark reflection of the economic struggles. According to a 2023 survey by Mizuho Research & Technologies, the weak yen has hit households hard. With the exchange rate at 150 yen per dollar, the average burden on households with two or more members jumped by 102,148 yen from 2022. For those earning under 3 million yen a year, the extra cost was 65,940 yen, while those making between 5-6 million yen faced an increase of 95,642 yen.
โThe rise in household expenses isnโt just due to higher prices for food and daily necessities caused by yen depreciation, but also due to increased service costs,โ explained Saikuke Sakai, Chief Economist who conducted the simulation.
In other words, people are shelling out more money while their earnings remain the same or barely increase. Coupled with work environments plagued by disparities, long hours, and outdated systems, many young people are finding itโs simply not worth the candle.
Better off abroad
All these pieces are coming together, driving young people to leave Japan. NHK spoke with some of them, and their reasons are eye-opening.
“My income is about double what it was in Japan,” said Kuno Daichi, a 31-year-old now working in Australia. “In Japan, I made around 300,000 yen a month and saved 30,000 to 50,000 yen. Now, I save about 300,000 yen each month. It feels like my savings have multiplied tenfold.”
Many are finding that the perks go beyond just financial gains, like improved free time and work-life balance. For instance, 22-year-old Takahashi Riri, who moved to Australia after graduating, highlights how leaving Japan’s low starting salaries has also brought about a host of other positive changes in her life.
โIn Japan, my salary might have covered the essentials. But it didnโt allow for hobbies or time with friends, which left me feeling isolated,” she says, adding that she feared her life would revolve solely around work.
Of course, Japan isnโt the only place where young people are struggling economically or choosing to move abroad. Many other countries face similar issues. But in Japan, the factors are really adding up, fueling a noticeable trend. And while some are just building a financial cushion temporarily, others are increasingly tempted to make their new country a permanent home.
To tackle this, a major shift is needed. Promises and discussions wonโt cut it; both the government and businesses need to act fast. If they donโt, Japanโs social issuesโalready significantโcould escalate into pervasive problems that affect every facet of daily life.
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