FOCUS: Worker Cooperatives Sustain Services in Depopulated Rural Japan

Tokyo, Jan. 28 (Jiji Press)–In depopulated areas across Japan, the withdrawal of supermarkets and other businesses has left essential services, vital to residents’ daily lives, at risk. To address this problem, some local governments are turning to resident-led nonprofit organizations known as “workers’ cooperatives” as new providers of local services. In these cooperatives, residents themselves plan, develop and operate the services their communities need, supported by local government subsidies for startup and operating costs. The Ministry of Economy, Trade and Industry is also working to create a framework to make it easier for such organizations to receive financial assistance and other forms of support. Workers’ cooperatives were introduced under a new law that came into force in October 2022. These cooperatives can be established by as few as three founding members, who both provide the capital and manage the business. There are virtually no restrictions on the types of businesses they may operate. Since members enter into labor contracts with the cooperative, their labor rights, such as the minimum wage and entitlement to days off, are legally protected. According to the Ministry of Health, Labor and Welfare, 173 workers’ cooperatives had been established as of November 2025. These organizations are primarily engaged in fields such as nursing care, retail management and support services for children. Unlike at joint-stock companies, every member of workers’ cooperatives has equal voting rights regardless of the amount of capital they contribute. As members are able to exchange opinions on an equal footing, workers’ cooperatives are expected to develop businesses that respond closely to local needs. Some municipalities have begun offering support for such initiatives as part of their strategies to combat depopulation. In fiscal 2023, the Tsukuba city government in Ibaraki Prefecture, eastern Japan, began holding seminars led by outside experts to explain the system and procedures for establishing workers’ cooperatives. Building on the initiative, the city introduced a subsidy program in fiscal 2024 that provides up to 600,000 yen per group annually. The program has already contributed to the successful launch of a workers’ cooperative involved in projects such as restoring abandoned farmland. “It’s difficult for local governments to address community issues on their own,” a city official said. “If residents can effectively turn their own experiences into work, it will have a positive impact on sustainable community development.” The municipal governments of Hiroshima in Hiroshima Prefecture and Kyotango in Kyoto Prefecture, both located in western Japan, have introduced similar financial support measures, which are gradually beginning to yield positive results. Ensuring profitability remains a major challenge. According to the Japan Workers’ Cooperative Union, there are few national subsidies available, and this lack of funding has forced many planned workers’ cooperatives to be abandoned. In addition, as the framework itself is not widely understood, some cooperatives face lengthy delays in securing financing from financial institutions and completing the required procedures. In December 2025, during an expert panel meeting of the Industrial Structure Council, an advisory body to the economy minister, the economy ministry released a draft interim report outlining measures to maintain essential services in depopulated areas. The report proposed a new system under which local governments would certify regional essential service operators, making it easier for them to receive financial assistance and other forms of support. It also made clear that, as well as private companies, nonprofit organizations such as consumers’ cooperatives and workers’ cooperatives would be eligible for this financial support. A senior ministry official explained that the system is “designed in particular to expand the role of workers’ cooperatives.” The ministry is also considering the establishment of a debt guarantee program to support these cooperatives. “In addition to easing cost burdens, we would like to explore forms of assistance that enhance their visibility and strengthen their brand power,” the official said. END [Copyright The Jiji Press, Ltd.]