Die verborgenen Risiken von Working Holidays: Die Erfahrungen einer 27-jährigen Frau und was Sie wissen müssen, bevor Sie ins Ausland gehen

Article posted on Jan 2 2025

Page 1: The Rise of Working Holiday Program Participants Seeking Overseas Jobs Amid Japan’s Wage Stagnation and Weak Yen

The Working Holiday program, which began in 1980, has seen a significant increase in young people using it for overseas labor, driven by Japan’s relatively low wages and the weakening yen. However, it’s important to remember that working abroad carries inherent risks. Let’s take a closer look at the realities, risks, and precautions of the Working Holiday program, explained by financial planner Shiho Yamamoto of FP Office.

Increasing Number of Young People Using “Working Holiday” for Overseas Employment

Since the Reiwa era, the number of young people using the “Working Holiday System” for “guest work” to increase their income has skyrocketed.

The original purpose of the “Working Holiday System” (hereafter referred to as WH) is to facilitate “vacation and international exchange.” According to the Ministry of Foreign Affairs, the system is defined as follows:

The Working Holiday System is an agreement between two countries or regions, allowing the youth of each country or region to enter the other for vacation purposes. During their stay, they may take up supplementary employment to help fund their travel or stay. The goal is to provide young people from each country or region with the opportunity to experience the culture and lifestyle of the other, deepening mutual understanding between the countries or regions.

Source: Ministry of Foreign Affairs, “Working Holiday System”

Popular Australia: Wage Gap with Japan More Than Doubled

Currently, there are agreements with 30 countries and regions around the world, and one of the most popular destinations is Australia. A survey by study abroad agency “School With” titled “2024 Working Holiday Minimum Wage and Monthly Income Survey by Country” ranked Australia second for the highest wages among working holiday destinations.

Australia’s proximity to Japan, good safety standards, and rising minimum wages have made it a popular choice. Since the COVID-19 pandemic, the exchange rate has shifted by nearly 30%, with the yen depreciating and the Australian dollar strengthening. As a result, the wage gap between Japan and Australia has more than doubled. Over the past 30 years, wages in some countries have risen by two to three times, but Japanese wages have stagnated for a long period.

“Working Holiday = Earning Big Money”—Is It Really True? The Harsh Realities Faced Abroad

Looking at these statistics, it’s easy to think, “It’s better to go abroad than stay in Japan to earn money.” However, many people return disappointed, realizing the reality isn’t what they expected. A 27-year-old woman, T-san, who was invited by a university friend to go to Australia, was one such person.

Page 3: T-san’s “Unexpected” Tragedy That Broke Her Spirit

T-san, who decided to go abroad on a working holiday with a light heart, had watched a video feature with K-san on a streaming site that focused on the “bright” side of the working holiday experience. However, many people who’ve used the working holiday program have found themselves struggling to find work, with some applying to over 100 companies without success and wandering around with their resumes in hand.

T-san, too, found herself frustrated by the days of not landing a job. After a lot of effort, she finally managed to get hired by a restaurant. Her salary tripled, and she was overjoyed, thinking, “I can earn this much!”

However, the cost of living in Australia is high. While her income increased, the expenses for living there were much higher compared to Japan, leaving her with no room to save.

Then, one day, an unexpected accident occurred.

While enjoying an activity during her time off, T-san tripped on a rock at the beach and fell. She was taken to the hospital, where it was determined that she had broken a toe and would need three weeks to recover.

Having never suffered a major illness or injury before and thinking “I probably won’t need to go to the hospital while I’m abroad”, T-san had only minimal health insurance coverage. As a result, she had to pay nearly all of her medical expenses out of pocket. Additionally, she had to take time off from work for treatment.

“I might get fired… Maybe I should’ve thought this through more. I want to see my parents, see my friends. I just want to go home…” T-san felt financially and emotionally overwhelmed. All she could think about was her regret.

The “Pitfalls” of the Working Holiday That T-san Never Expected

[Chart 4] Medical Costs in Gold Coast, Australia
Source: JI General Insurance Co., Ltd. “Overseas Healthcare Information (Australia – Gold Coast)”

As mentioned earlier, the number of people using the working holiday program for overseas labor has been steadily increasing, and it’s often discussed on social media. However, it’s important to exercise caution before jumping in. In T-san’s case, the issues she encountered while in Australia on a working holiday can be summarized into two main points:

1. Unexpectedly High Cost of Living

In recent years, Australia has seen rising labor costs due to significant increases in the minimum wage, inflation driven by the war in Ukraine causing spikes in oil and natural gas prices, and the ongoing effects of COVID-19. In particular, inflation surged in 2022, reaching an annual rate of about 6.6%.

Alongside this inflation, the “strong Australian dollar and weak yen” have also contributed to higher living costs.

In 2020, the exchange rate was approximately 73 yen to 1 Australian dollar. As of June 2024, it’s risen to about 96 yen to 1 Australian dollar. This means that what cost 7,300 yen for 100 Australian dollars in 2020 now costs 9,600 yen.

2. High Medical Expenses

While Australia boasts advanced healthcare and hygiene standards, medical costs are several times higher than in Japan. Australia does have a public health insurance system called “Medicare,” which is similar to Japan’s national health insurance. However, this system only covers Australian citizens and permanent residents. Therefore, people on working holidays are not eligible.

For working holiday participants, all medical costs in Australia are borne entirely by the individual, making it essential to have comprehensive “overseas travel insurance” to cover potential costs.

When looking into the working holiday program, it’s common to find information about “study abroad insurance,” which can cost around ¥200,000–¥300,000 per year of stay.

However, in an effort to minimize costs, T-san opted for minimal coverage. As a result, in situations like hers, where the insurance did not cover enough for injuries or illness, she had to pay the remaining balance herself.

To avoid such situations, it’s important to understand the differences in healthcare systems between Japan and the country you’re visiting. Before purchasing insurance, always verify that the coverage amount is sufficient to protect you in case of unforeseen events.