Japan Inc braces for labor reform

"Coming on top of labor shortages, Abe's plan will cause declines in sales and profits. We have done what we can in terms of streamlining," wrote a manager at a machinery maker, one of the nine percent of firms which saw a considerable jump in labor costs.

For mid-size and smaller manufacturers I can testify that this is true, BUT for the major corporations, hell no, they have not streamlined, they still do mass hiring and waste time, productivity, and money on training people for jobs that have little or no future.

Investing in technology - from new computer systems to artificial intelligence, robots and the internet of things - was the most cited method of boosting productivity in the survey. But implementing this could be easier said than done.

Should have done this years ago, many Japanese offices are still stuck in using paper for everything under the sun! Less workers means having to adapt to survive, but adaptation in a Japanese business takes too much time.

I'm sure half of the "costs" they will encounter is the NEW phenomenon of paying a person for their overtime work.

"Japan's plans to implement more employee-friendly laws..."

Implement, not enforce

"None so deaf as those that will not hear. None so blind as those that will not see."

And this statement proves the point.....

"Coming on top of labour shortages, Abe's plan will cause declines in sales and profits. We have done what we can in terms of streamlining,".....Says the manager.

If he took the time to turn to his left or right, would view a long row of unproductive managers promoted similarly through the same seniority based entitlement regime.  All sitting comfortably on bloated remuneration packages, at the expense of the hard work and innovation of the forty percent struggling on a pittance masquerading as a living wage

Cutting down on useless internal meetings? That is a 10% boost in productivity right there.

Japanese companies have not been paying their workers well for years now. Abe has begged them to

do so but no response, not even from the hugely profitable Japanese firms. So now it will happen and that

is good for Japan.

"Coming on top of labor shortages, Abe's plan will cause declines in sales and profits. We have done what we can in terms of streamlining," 

At the same time, Japan - the world's third-largest economy - ranks higher than many other advanced economies in terms of annual total working hours per worker,

It's easy to build a strong economy when you don't pay employees for their total hours worked. It used to be called, slavery. Now, Japanese companies are complaining their profits will drop if they have to pay employees for their hours worked and they have to limit how many hours they make them work. Welcome to the 21st century Japan!

Throughout the history of capitalism, employers have rejected labor reforms. However, the reforms, after being forced through, have contributed to greater prosperity....and profits. That's because 60-70% of GDP is consumer demand.

These greedy, shortsighted business sector people need to look beyond their quarter to quarter bottom line...for all of our sake.

Consumer demand is not GDP. Production is production.

Consumer demand is just a way to measure that which was produced.

Productive workers will be rewarded with good wages and thus the propensity to consume, under the right policies that incentivize productivity. Japan has a long way to go to get there by the sounds of things.

Japan output per hour is truly shocking, yet automation is almost 22 percent higher than the nearest competitor. Measured by over 270,000 robotic processes in thirty diverse sector. Seriously  Japan is a digital system response global phenomenon.

So where are the wobbly wheels? I have forty of them, legacy middle management from business investments.

They profess to be the sharp end of skill engineering achievement. Yet these disciplines have been replaced by sophisticated software system development. They ceased being skilled engineers when deciding to delegate every task given to them , then justifying their salary by moving paper from one tray across to the other.  

Worst of all they refuse to re-skill or adapt to change, and are contractually superglued to their desks. The only way to dislodged these managers is to rubber room them, which is inhuman. So the way forward is for this government instate/enact the promised reforms.

I'm sure half of the "costs" they will encounter is the NEW phenomenon of paying a person for their overtime work.

Learn something here please, paying overtime used to be automatic. I worked for a major Japanese corporation during the bubble years and plenty of co-workers didnt actually begin "working" until 5PM, we made a killing on overtime, many months, double our normal salary.

It's no phenomenon

Buaahhh! Cry me a river. Companies complaining about having to care about their best assets, their employees.

If they can get this to work (i.e., if companies really cooperate), Japanese might start getting married again and having kids.

If they can get this to work (i.e., if companies really cooperate), Japanese might start getting married again and having kids.

This is totally different. Just because they may control some level of overtime, it does nothing about the lack of inter-sex communication skills. Just getting married for marriage sake or to have kids is one of the WORST reasons ever.

I feel this encapsulates one of Japan's biggest hurdles to productivity:

I, like most foreigners in Japan, started out teaching before I found my way to finance.

An old student called me and asked if I could help out one of his colleagues. He was a freshman with a degree in robotics from Kyoto U if I remember correctly, but Mitsubishi hired him and assigned him to corporate finance.

He had never taken and business course and was now in his six month making copies and being a file clerk.

Even though I was no longer teaching I agreed to meet with him twice a week and give him Business 101. After about 2 months they allowed him to attended his first meeting and after about 6 he had progressed enough to be integrated into the team.

The point being, that HR as the all powerful decider of fates with so little input from the hiring managers is the not often enough discussed hidden reason for quite a bit of the efficiency deficiencies we see at J companies.

Stop the rotations and let the employees work with managers on career development A happy, engaged work force is what drives productivity.

Do Americans and Europeans working for Japanese companies do all this overtime work for free too? I am curious about that. I for one would not do it.

The Government have opened Pandoras Box on this issue. It artificially increases share prices and the Nikki, It is a huge problem in Japan and it add billion the the Nikki. With trade deals with other Countries will have to negotiate the problem of unpaid work. Countries dealing with Japan will see it has illegal government subbing industries. Japan only way of fixing this unpaid labor will not be through Government regulation or relying on the Companies involve to fix the problem in House. They only find another way of lift margin and profits. It will up to the Japanese work force to start refusing to do unpaid work. It will have be the Union of Japan to get together an start a Media champagne on NHK id government give 100 hour a week of free air time. This is the only way Japan of easing a ecomonic turn down form massive turn down. Japan has to fix this up or Countries won't do a deal on trade until it is clean up. This is way the government has final come out and deal with it . And in a very poor manner.

Yuburu : Yes Big Multi national and big Japanese companies are involved up to their neck directly or at arms length. I have proof and have alerted 2 companies of such evidence. Once worker phone data is pulled showing the multitude people at unpaid work when showing sign off you will be amazed at how huge this abuse is. IT HUGE. It going to effect GDP, Trade deals with other countries, share prices and the Nikki. My Partner has work the last 18 month under this culture for two different Multinationals it RAMPED, It was and is still common to work 12 sign off work another 2 to 4 hour 3 to 4 shift a week for all workers on all shift. Instance of worker pull 12 then cover the next 12 hours shift are common too. These are Big Companies, One is American and the other a Big Japanese manufacturer.

Should have done more to promote "legal" immigration way back when to have more legal immigrants paying into the system.