Over the last decade, Masato Shiota brought his papermaking business back from the brink, paying down debt and buying machinery to automate some production. But he struggles to find workers to keep output at full capacity.
“We have three machines but only have two running on any day,” said Shiota, president of Wako Seishi, which produces tissues, disinfectant wipes and toilet paper in Ino, a town on the smallest of Japan’s four main islands known for its paper industry.
“If we don’t have the people we can’t make products and we can’t turn a profit. We’ll go under. This is the biggest problem for small and medium-sized companies.”
Shiota’s experiences and those of several other Ino business owners show how a labour shortage is a growing threat to smaller companies that provide seven out of every 10 jobs in Japan.
The country faces a deficit of 3.4 million workers by the end of this decade and 11 million by 2040, according to a 2023 study by Recruit Works Institute.
In the first half of this year, a record 182 companies went under because of worker shortages, according to research firm Teikoku Databank, up 66 per cent on a year earlier. Overall bankruptcies look set to surpass 10,000 this year, the highest since 2013, data from Tokyo Shoko Research showed this month.