Human Capital Hara-Kiri

Why most Japanese talent goes to waste.

In Japan, you see native-born East Asians doing menial jobs everywhere you look. You see Japanese janitors, Japanese street-sweepers, Japanese convenience store workers, Japanese crossing guards, Japanese taxi drivers, and Japanese laborers on construction sites. They’re almost always doing a stellar job; indeed, most of them act like they’re striving for perfection.

For American tourists, there’s something instantly eerie about the whole situation. But only during my third trip to Japan was I finally able to articulate it. Watching Japanese menial workers is shocking to Americans because Japanese-Americans virtually never do menial jobs! Indeed, virtually the only East Asians of any kind who do menial jobs in the United States are first-generation immigrants. As long as they speak unaccented English, Japanese-Americans, along with Chinese Americans, Korean-Americans, and Vietnamese Americans, are high-skilled, or at least mid-skilled.

You’ve never seen a team like this in the USA, have you?

What’s going on? Simple: In a country like Japan where 80% of adults have the intelligence and discipline to do skilled work, the competition to get skilled work is ferocious. Plenty of high-skilled Japanese workers therefore end up in mid-skilled jobs, which in turn pushes mid-skilled Japanese down to low-skilled jobs.

In contrast, in a country like the United States where only, say, 40% of adults have the right stuff to do skilled work, the competition to get skilled work is modest. As a result, Japanese-Americans end up in positions suitable for their talent.

Why, you may ask, can’t the Japanese just drastically expand their high-skilled industries — and mechanize all the low-skilled toil? Because neither route is remotely practical, much less profitable. Modern economies are 80% services, and despite effervescent hopes of transformative AI, almost all services must still be performed in-person by humans. In a world of Einsteins, Einsteins have to sweep the streets. And in the world of the Japanese, Japanese have to sweep the streets.

Which is a stealth tragedy for all humanity. The United Negro College Fund is absolutely correct: A mind is a terrible thing to waste. Imagine, dear reader, if you were stuck being a janitor even though you plainly had the talent to do so much more. It would be a personal tragedy for you — plus a social tragedy for all the consumers of the millions of extra dollars of value you would have produced during your lifetime.

How, though, can this tragedy of overqualification be averted? The answer is as economically demonstrable as it is politically abhorrent. With mass low-skilled immigration! If Japan admitted 50 million foreigners to do low-skilled work, they would not durably disemploy native-born Japanese janitors, street-sweepers, convenience store workers, crossing guards, taxi drivers, and laborers on construction sites. The low-skilled immigrants would massively increase demand for high-skilled workers — and under-placed Japanese workers would soon find new, better jobs. Exactly as Peri and Sparber’s famous paper on immigration and task specialization carefully explains.

One concrete example: Mass immigration would sharply increase demand for convenience stores, which would in turn sharply increase demand for convenience store managers. The straightforward way to fill these positions, in turn, would be to promote the overqualified Japanese cashiers of today to leadership roles managing the new arrivals. Roles befitting their talents.

The good news, by the way, is that Japan is quickly moving in my recommended direction. Japan’s foreign-born workforce almost quadrupled during the last two decades. You can already see plenty of immigrants working in hotels, restaurants, and convenience stores. But Japan’s foreign-born share remains sadly low by OECD standards. And as rural Japan implodes, 97% of its agricultural workers remain native-born. Sheer folly.

You might demur, “Low-skilled Japanese workers are perfectly happy with their current positions, because Japanese society accords great honor to every useful social role.” This cultural observation is not entirely wrong: Low-skilled Japanese workers do seem to work with more pride — and receive more respect — than their American counterparts.

Yet on further reflection, this cope is a gross exaggeration. Japanese families wouldn’t infamously ruin their kids’ childhoods with hellish cram schools unless parents and children alike regarded engineering robots as massively preferable to mopping floors. The Japanese speak very politely to janitors, but in their heart of hearts, they too feel on a gut level that it’s really bad to end up as a janitor if you have the talent to be an engineer. And in this case, gut instincts are dead right.

Demagogues may denounce my claims as racist or otherwise heinous. “So janitors have to be black or Hispanic? The Japanese are too genetically gifted for such work?!” But what I say is true, and Japan and the world should ignore the demagogues and take heed.

Fact: The Japanese in Japan do almost all of the menial jobs.

Fact: Japanese-Americans almost never do such jobs in America.

Fact: Both groups are similarly extraordinarily talented workers — and it really doesn’t matter why. (Though if you protest, “Japanese-Americans were strongly positively selected,” you’re incorrect. It was Japanese commoners, not elites, that moved to opportunity during the open borders era).

So what’s the difference? Japanese-Americans dramatically benefit from all of the lower-skilled workers that fill this country. And Japanese-Japanese could enjoy the same bonanza if they welcomed tens or hundreds of millions of lower-skilled foreigners to their country. Like Emirates.

Yes, you can scoff, “Bonanza? That’s just money.” But the bonanza is emphatically not just money. Being massively overqualified for your job doesn’t merely make you poor. Being massively overqualified for your job is soul-crushing. And for all its touristic wonders, low-immigration Japan is the heart of soul-crushing overqualification on Earth.

Yep.