The Cognitive Sorting Machine: How Japan's Labor Market Wastes Human Capital Across the Entire Spectrum

Japan's labor force surpassed 70 million in 2025 despite continuous population decline, yet firmsreport the worst labor shortages in three decades. The standard explanation is demographic.This paper proposes an alternative: Japan's labor market functions as a cognitive sortingmachine that systematically discards human capital at both ends of the cognitive spectrum. Atthe lower end, public employment systems—job listings, vocational training, administrativeprocedures—embed an implicit "IQ 100 design assumption" that structurally excludes asignificant portion of the approximately 17 million individuals in the borderline intellectualfunctioning range (IQ 70–85). At the upper end, non-scientific hiring processes screen outexperienced workers whose crystallized intelligence has peaked past age 40, usingproxies—age, credentials, interview impressions—that bear little empirical relation to jobperformance (Schmidt & Hunter, 1998; Sackett et al., 2022). The darkest irony: if IQ 100 is theimplicit threshold, 50 percent of the population falls below it by definition. If the actual employerexpectation is higher still, the labor shortage is partially manufactured by the sorting machineitself. Drawing on the administrative burden literature (Christensen et al., 2020; Herd &Moynihan, 2018) and the curb cut effect framework, we introduce the concept of cognitiveinfrastructure—the systemic redesign of public-facing systems so that cognitive accessibility is adefault property—and argue that it functions as a meta-policy amplifying the effectiveness of allexisting labor shortage countermeasures. We survey legislative precedents from Canada, theEU, and Spain, and propose a phased implementation framework. The problem is not theworkforce. The problem is the machine that sorts it.