Young workers head to Australia eyeing higher pay and better work-life balance

Tomoki Yoshihara starts his shift at a meat-processing plant in rural Australia at 5am, and earns three times more butchering lamb for almost 50 hours a week than he did as a member of Japan’s military.

He is among a record number of young Japanese granted working holiday visas in Australia last financial year, lured by higher wages that are made even more attractive by the weakening yen.

“From a salary perspective, it’s so much better here,” said the 25-year-old, who earns around A$5,000 (HK$25,300) a month after tax and lives in Goulburn, south of Sydney. “If you want to save money, Australia is the place to be.”

With similar visa programmes in Britain, Canada and New Zealand, the outflow of talent risks exacerbating Japan’s acute labour shortage. It is also a sign that many younger Japanese are not buying into the nation’s economic optimism as it exits from decades of deflation. “Youth are questioning Japan’s economic outlook,” said Yuya Kikkawa, an economist at Meiji Yasuda Research Institute. “Living conditions are far tougher than the headline inflation figure suggests.”

The Bank of Japan finally scrapped the world’s last negative interest rate last month amid signs a virtuous cycle of wage gains is feeding demand-led inflation. But even after Japanese trade unions won their biggest wage increase in more than 30 years last month, there remains a notable gap in real wages with other advanced economies.

In 2022, average annual wages in Japan were US$41,509, compared with Australia’s US$59,408 and US$77,463 in the United States, according to the latest data from the Organisation for Economic Cooperation and Development.

A long-running trade-off that put job security ahead of higher pay made more sense when prices were barely moving. Now with inflation at its strongest in decades, Japanese are starting to realise that years of static wages leave many of them budgeting each month before their next pay cheque.

“Japan’s wages hadn’t risen at all for 20 years while other countries were increasing theirs,” said Atsushi Takeda, chief economist at Itochu Research Institute. “With the yen getting weaker, the gap has become even bigger.”

Some 14,398 Japanese were granted working holiday visas in Australia in fiscal 2022-23, the highest number in Australian government data going back to 2001. The programme allows 18to 30-year-olds (or 35 in some countries) to have a 12-month holiday and work in roles ranging from farming to hospitality, nursing, construction or office work to fund their trip. There is also an option to extend the scheme up to three years.

On top of the attractive wages, Australia has been a popular destination for Japanese because of its perceived safety, the similar time zone to Japan and rules that allow visa holders to work for more than six months for employers in certain industries. “[Australia] always had a generous visa system, but recent changes in lengthening the employment period made it even easier for Japanese to move there,” said Kotaro Sanada, a spokesman for the Japan Association for Working Holiday Makers.

Canada also issued 7,996 such visas in 2023 until October, while Britain issued 898 last year, according to host-country data.

New Zealand approved 2,404 in fiscal 2022-23. Sanada said numbers might rise further as rules were relaxed. He expected Britain to become the next popular destination after the annual visa quota for Japanese was raised to 6,000 from 1,500.