Japan faces a historic labor shortage that has evolved from a cyclical trend into a structural labor supply constraint driven by a shrinking working-age population. Projections suggest a deficit of 11 million workers by 2040, which would threaten essential social services. This paper quantitatively analyzes this shift through four macroeconomic lenses: labor supply–demand, productivity, capital intensification, and market liquidity.

The findings reveal that while labor demand is at record highs, wage stickiness persists, and real wages continue to stagnate compared to G7 peers. This is compounded by an expanding structural mismatch in the labor market and a decline in labor mobility (Lilien Index). Furthermore, although capital deepening in manufacturing shows promise, non-manufacturing sectors struggle with low investment efficiency. While specific labor-saving technologies like robotic process automation and service robots significantly boost productivity, a massive gap in human capital investment remains. To ensure sustainable growth, Japan needs to transition to a high-productivity model by fostering autonomous reskilling and facilitating labor transition toward high-value-added sectors.

This paper examines planning administration under labor supply constraints in Japan. The present labor shortage is no longer a cyclical phenomenon but a structural condition in which labor supply itself has become the binding constraint on policy implementation. Official population projections show that between 2020 and 2040 the working-age population will fall by nearly 13 million while the population aged 85 and over will rise by about 3.9 million. At the same time, household statistics show continuing fragmentation of everyday life: total households increased from 37.5 million in 1986 to 54.8 million in 2024, and one-person households now account for 34.6 percent. These dynamics expand demand for essential services while lowering the labor productivity of service delivery. Interpreting this shift as the “Reiwa turning point,” the paper argues that planning administration must move beyond budgeting and facility provision toward cross-sector labor allocation, service-level redesign, and labor-saving investment. The Toyama model illustrates how regional labor supply-demand simulation can support anticipatory governance under labor scarcity.

This article examines labor shortages in Japan from the perspective of digital talent development. It argues that the issue should not be understood merely as a shortage of workers, but as a challenge of redesigning work and upgrading existing human resources within the context of demographic decline. As the labor force participation of women and older workers approaches its limits, the key question becomes how to generate more value from the current workforce. The spread of generative AI is changing both the type of digital talent required, and how it should be developed. The focus is shifting from solely cultivating advanced IT specialists, to enabling workers across occupations to integrate generative AI into everyday tasks and create value by redesigning their work. However, this shift is constrained by organizational immaturity, the concentration of learning and support burdens among a small group of active users, and the absence of clear labor-market valuation for generative AI skills. The article concludes that digital talent development can become a viable response to labor shortages only if policy helps build soft infrastructure connecting learning and practical experience with job roles, placement, compensation, and labor mobility.

This paper examines the role and future prospects of labor unions in addressing labor shortages in Japan’s trucking industry. Labor shortages have intensified in recent years, particularly highlighted by the 2024 problem, which reflects not only regulatory changes in working hours but also deeper structural constraints on labor supply. In response, the government has introduced a range of policies aimed at improving logistics sustainability, including the Logistics Efficiency Act, reforms to transaction practices, and measures to promote cost pass-through and efficiency.

While these policies have contributed to some improvements in pricing and operational efficiency, they remain insufficient in addressing the core issue of workers’ conditions. Even when prices rise and revenues increase, these gains do not automatically translate into higher wages or better working conditions. This is because wage determination depends on how revenues are distributed, not merely on market conditions. In highly competitive industries such as trucking, firm-level wage increases are constrained, which makes collective coordination essential. This paper argues that labor unions play a crucial role in linking pricing structures to wage outcomes. However, their effectiveness is currently limited by declining unionization, enterprise-based bargaining, and fragmented subcontracting structures. The paper concludes by highlighting the need to reconsider institutional frameworks for collective wage-setting and worker representation.

Labor shortages among small and medium-sized enterprises (SMEs) that support regional communities have become increasingly severe against the backdrop of a declining birthrate, an aging population, and overall population decline. This paper conducts a structural analysis based on the perspective that this issue is not merely a management problem for individual companies, but a critical regional policy challenge that fundamentally threatens the sustainability of regional economies. By analyzing the current state of talent outflow and the employment structure in regional areas, this study clarifies how indispensable the survival of SMEs is to the maintenance of local communities as a whole. Furthermore, it proposes a paradigm shift in human resource strategy, redefining labor not as a cost but as a form of capital. Through a comprehensive approach that integrates both practical measures and philosophical principles, this paper presents a pathway for rebuilding sustainable regional economies.

Policy debates on the acceptance of foreign workers in Japan have long been framed around the idea of addressing labor shortages. Since the “open-door debate”, Kaikokuronso, of the late 1980’s, the discourse of labor shortages has functioned as the main justification for expanding the presence of foreign workers and became explicitly institutionalized with the introduction of the Specified Skilled Worker Program in 2019. However, this paper argues that such a framework obscures the actual function of foreign workers in Japan. Drawing on the case studies of Nikkeijin workers, it shows that foreign workers have been accepted not primarily to fill labor shortages, but to maintain a pool of surplus labor under conditions of semi-unemployment. Similar dynamics can be observed in the Technical Intern Training Program. As Asato (2023) argues, trainees are, like Nikkeijin workers, used not to compensate for labor shortages but to create a pool of surplus labor. Thus, labor shortage discourse conceals the structural realities of Japan’s foreign workers regime.

This paper examines how Japan’s current labor shortage affects non-regular employment and whether the long-standing dualization between regular and non-regular employment is winding down. The analysis reveals four key points. First, companies are struggling to hire regular employees and thus increasingly use non-regular workers as substitutes as they seek high-quality, long-term talent. Second, the core demographic of non-regular workers has shifted from working-age women to older adults. While involuntary non-regular workers have decreased due to an improved youth labor market, poor treatment persists for those remaining in non-regular roles. Third, transitions from non-regular to regular employment are increasing and potentially expanding to women as well as men. However, treatment issues remain alongside the use of diversified regular employees. Fourth, companies using non-regular workers as substitutes tend to have fundamentally low wages for regular employees, which prevents them from hiring regular staff. Although the labor shortage has increased transitions to regular employment and altered how non-regular workers are used—indicating signs of change in the traditional dualized structure—the poor treatment of non-regular workers remains fundamentally unresolved.

Although Japanese local governments appear to be reluctant to invest in bonds, they should consider investing in bonds with high rates of return if they have surplus funds. However, interest rates in Japan have remained low, making it difficult to undertake bond investments. Therefore, this study aimed to provide a framework for local government officials engaged in bond management. Specifically, it examined investment methods that can serve as a guideline for bond investing in a low-interest-rate environment. The main conclusions obtained from the analysis of fixed-income government bonds are as follows. The break-even point analysis revealed that selling before maturity is more advantageous than holding to maturity when the final yield is negative, and this condition does not change even if the yield curve changes. Moreover, if a bond has a negative interest rate for its remaining life, the owner should consider selling it rather than hold it until maturity.