Beyond the Yen: Where Japan’s Economic Power Falls Short in Providing for Its Youth

Japan is known to be fiscally prestigious, housing global giants such as Nintendo, Honda, and Sony that set apart the country’s world-class export economy from others. Additionally, the country is renowned for possessing a high domestic savings rate and a stable financial system that strengthens investor trust and helps the country maintain fiscal independence.

However, behind Japan’s global image, economic shifts greatly affect younger generations, with international youth often finding themselves in a particularly precarious situation within Japanese society compared to its own citizens. Across Japan, youth migrants continue to face financial pressure from the Japanese government, a symptom of the country’s ongoing economic struggles.

In a publication from Asean Macroeconomic Research Office (AMRO), Senior Economist, Paolo Hernando, highlights that the primary cause of the extensively high public debt is the “rapid rise of social security expenditures, specifically those linked to an aging population, such as pensions, medical care, and long-term care.” The mounting costs of supporting Japan’s rapidly aging population limits the government’s capacity to provide long-term financial aid to incoming youth.

Consequently, the government has taken limited measures that fail to keep up with changes in the economy. Financial aid programs for international students remain modest and have not adjusted to reflect current conditions, making them inadequate in the face of inflation and currency decline.

Accompanying this, strict regulations are placed on international students regarding part-time work, as students on a “Student” visa are generally restricted to working 28 hours per week during regular academic terms. Although 28 hours might seem reasonable, minimum wages and high urban living costs — especially in cities like Tokyo or Osaka — make it difficult for students to cover all their expenses. These policies create a challenging economic environment, undermining motivated individuals that could contribute more significantly to the Japanese workforce.

Reggie, 23, attends school in Japan

To gain a more comprehensive understanding of the economic conditions affecting international youth, I spoke with Reggie — a 23 year old Filipina student who has lived in Japan for the past three years. Reggie states that Japan's prices “keep getting higher and higher, so even if they give us money, the work wages will not increase and transportation fees will not decrease.” She explains that the Japanese government primarily provides financial support only during times of crisis.

Over the past three years, Japan has also navigated significant fiscal headwinds originating from its long-term challenges within its market, which have diverted focus and resources from its international youth population. The country endured stringent isolation protocols during the pandemic, leading to economic recession. This was impacted by inflation rates that have, at times, climbed higher than in many other post-industrial nations. Reggie shares that rice — a staple in Japanese cuisine — had to be replaced with bread in her household due to its rising cost.

These persistent macroeconomic challenges have compelled Japan to prioritize immediate economic stability, often through policies that serve as short-term fixes rather than comprehensive, long-term support for its youth.

“I feel like it’s not enough, it’s like a bandaid solution.”

— Reggie, 23, University Student in Japan

This frustration isn’t unique to Reggie. Many international students in Japan share the same concern — that the government’s responses often prioritize short-term relief over sustainable, long-term solutions. But these challenges aren’t limited to the country’s international student population. Japanese youth, too, face similar financial pressures that are shaping the world they grow up in.

For many young people in Japan, these challenges are evident in the growing trend of non-regular employment, wages that struggle to keep pace with the rising cost of living, and the increasing burden of student loans. In response, many individuals turn to multiple part-time jobs, rather than securing full-time employment.

This lifestyle has become so widespread in Japan that there’s even a specific term for it: “Freeters” — a word used in Japan to describe school graduates (and/or the unmarried) who work in part-time or temporary jobs instead of regular full-time employment.

While definitive numbers fluctuate annually, the Japan Institute for Labour Policy (JILPT) recorded that in 2021, 1.37 million freeters made up the Japanese workforce. Although this was a significant decrease from past years such as 2003 (when the recorded number of freeters peaked at 2 million), this was an increase from 2020 due to the end of the pandemic. This resurgence reflects not just post-pandemic recovery, but a broader trend of economic instability forcing many young people into flexible, but unreliable, work arrangements.

Beyond unstable employment, many Japanese youth also face the reality that wages have not kept pace with the rising cost of living. Despite Japan’s low unemployment rate, wages — adjusted for inflation — have remained stagnant or have declined in recent years. This wage stagnation makes it increasingly difficult for young workers to afford rent, transportation, and other daily necessities, especially in major metropolitan areas.

Adding to the pressure is Japan’s growing student debt crisis. As higher education becomes more essential and expensive, more students are graduating with large amounts of debt. Unlike some countries that offer subsidized tuition, Japan’s system places much of the cost directly upon students and their families.

Together, low wage growth and rising student debt have left many young individuals feeling financially trapped — working hard, yet falling behind. Japan’s polished economic façade often conceals the growing financial challenges faced by its youth. While the country boasts its market stability and global industry prestige, its younger generations are increasingly burdened with the government’s tendency to implement short-term solutions, rather than reforms. Unless these systemic issues are addressed with long-term plans and inclusive policies, Japan may continue to fall short in supporting the future generations.

To learn more or support initiatives focused on youth empowerment and economic equity in Japan, consider exploring the work of the Japan Youth Platform for Sustainability (JYPS), which provides education and support for disadvantaged youth. You can also visit the Resource Hub under One of Many’s Take Action tab for more ways to engage with youth-centered economic justice globally.