Japan’s Impossible Trinity

Japn is having to face up to a big problem ATM, and it's one that other developed countries could find themselves dealing with soon enough.

It all starts with something anyone visiting Japan will recognise: the simple pleasure of an affordable curry lunch.

For years, grabbing a solid “Indian curry” meal for about 1,000 yen has been part of daily life for Japanese workers. It’s cheap, filling, and something you count on.

But now, even this everyday comfort is under threat.

And the reason why tells you a lot about Japan’s currrent economic crossroads.

Japan's Labour Crunch

Japan, like an increasing number of countries around the world, has an ageing population, and this also means the workforce is shrinking - and as older people retire there are simply too few native born Japanese people to fill the number of jobs that are required to be done.

This means Japan is increasingly dependent, like many other countries in a similar situation, on immigrant labour to fill those gaps!

But Japan isn’t really keen on large-scale immigration. The government has made it tougher to get visas and set all sorts of limits for foreign labor, mostly because many Japanese worry about losing cultural identity and social balance.

The end result is that there are fewer people able to do basic jobs like work in curry houses, which means number go up for wages and number go up for curry!

That’s good if you’re working. Not so great if you run a business—and those higher costs eventually show up on the menu. Suddenly, your go-to curry lunch isn’t so cheap.

Japan’s Dilemma: The Impossible Trinity

To put it bluntly Japan can really only have two out of these three things—

• Affordable everyday stuff
• Rising paychecks
• Low immigration

Try to have all three, the system falls apart.

Cut off immigration while your workforce shrinks, and you’ll fight for employees by offering more money. But then prices go up. Keep prices low, and pay stagnates. Or, open the door to more immigrant workers, and you ease the pressure on wages and prices—though that comes with its own social debates.

Every path means giving something up.

Not Just a Japanese Problem

The same issues echo across Europe and Britain, especially after Brexit. Plenty of people there want tighter borders, higher pay, and cheap services, all at once.

The US is no stranger to worker shortages either, even with plenty of immigration.

The Crunch Point

With fewer workers each year, Japan’s hitting a wall that can’t be avoided. There’s no fix that gives you everything. If you want higher pay, you (or someone) pays more at lunch. Keep prices down? You need more people. Stick with low immigration and cheap curry? Then wage growth stalls.

So, every country will face the same impossible balancing act sooner or later. It always boils down to this: which trade-off are you ready to live with? Japan’s impossible trinity is a preview of that uncomfortable choice.