business

Abe's labor reforms may boost 'disposable' workers, crimp wages

29 Comments
By Tetsushi Kajimoto

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What some people forget is that the average 'salaryman' (or woman) works many overtime hours for which they're not paid, effectively reducing their hourly wage, as well as in many cases destroying any semblance of a decent family life. I sympathize with those who struggle to get by and who wish for more secure work, but I think they'll get those better jobs and working conditions if the government goes through with its reforms. It may take a few years, but it will happen. As the article says, the social compact of working long hours just to have a secure job has seen its day. It's time to get a life.

0 ( +3 / -3 )

Labor reform in Japan is an unavoidable thing. Raise the salaries of irregular workers so that they can support their livelyhood with that status.

3 ( +6 / -3 )

“If you’re a temp and think about your old age, the future looks increasingly grim. To me, the aim of labor reform is to destroy job security.”

The future of Japan is nothing but grim, and regardless of whether one is a permanent worker or a temp, one's job is going to be at risk.

0 ( +2 / -2 )

They need to raise the wages of non-salaried workers and try to raise the number of salaried workers once again.

The stability that salaried workers get helps increase the prospects of marriage, more children and home ownership. All good for the economy and the country as a whole.

The security of lifetime employment was once the envy of many countries.

2 ( +2 / -0 )

Creating each year tide upon tide of risk averse, group-thinking generalists reliant on their Dohki, who know only their own monocultural ecosystem might just work when times are easy, information is controlled by a few, and there's no competition.

McJobs condemn these companies to lowest common denominator, copy-thy-neighbor mediocrity.

There's no reason why Japanese companies can't copy the Gaishikei and hire people mid-career as equally valued employees who if not already specialists, are certainly enthusiastic 'future experts'.

1 ( +1 / -0 )

Companies are pushing for this type of reform for one simple reason: eliminate the need to pay social security for their employees. It's not just that workers become temporary with no job security, they also don't get pensions or health care.

3 ( +3 / -0 )

If Abe gets his way many older employees will lose their jobs to younger and less expensive labour. What this also means is that less people will be employed and therefore domestic consumption will go down without more jobs being commensurately created. The Japanese economy has been hollowed out by corporate manufacturing investments overseas that has continued to make huge profits for companies but at the expense of employment in Japan. The devaluation of the yen, the increase in consumption tax, the allowance to terminate employment for any reason used by the company, the wrong use of resources to procure military equipment, the continuing aggressive moves against China and South Korea will all come together to push Japan deeper into maniac depression and hypertension..

0 ( +0 / -0 )

I think this article is only explaining the negative sides of labor reforms. Anyone who has worked for a Japanese company knows that one of the reason companies cannot increase wages of their productive employees is because they cannot fire the oji-sans who spend all day surfing the internet of having meetings. I have seen highly qualified 25 year old engineers getting less than 4 million a year while some oji-sans were getting double that while being no real use to the company. In a free society with a free labor market (read freedom to hire and FIRE), highly skilled and productive employees will always be able to negotiate their working conditions or else they will go somewhere else.

4 ( +5 / -1 )

I can't agree with the slant of this article. Abe's reforms are improving things for ordinary workers. There needs to be more fluidity in the labour force.

-7 ( +1 / -8 )

More Abenomics at work...

0 ( +1 / -1 )

The labour market is severely messed up in Japan, if one is working more than 30hrs a week they MUST be made into full time employees WITH benefits of pension & health insurance.

BUT at the same time those full time employees DO NOT GET LIFE EMPLOYMENT, if you cant do your job you can be let go.

And there should NOT be ways where companies can game the system so they can hire "temps" tare aren't really temporary!

It shouldn't be that complicated, but right now it is beyond seriously messed up, bottom line the DEAD WOOD needs to be tossed as its bringing the entire country down!

-2 ( +0 / -2 )

Mr Abe appears to have forgotten Japan has a shrinking labour force. When something is in short supply it has higher value.

0 ( +0 / -0 )

Canadian, a very good point. What people are forgetting is how much the old guys are making for sitting on their butts bullying others.

Another interesting point missing in this article is that many women here WANT low wages so they are covered under their husband's pension and health care. Lord knows I have bleated on and on about how damaging this is to women who are unmarried, widowed and/or single mothers. Until the who notion of spouses (let's be honest, women) making less than 1.3 million yen and year and getting covered by their spouses pension/health care, plenty of single women are going to be living in poverty. Why bother paying someone a decent wage when a wife for work for peanuts?

-1 ( +3 / -4 )

@CanadianJapan

Anyone who has worked for a Japanese company knows that one of the reason companies cannot increase wages of their productive employees is because they cannot fire the oji-sans who spend all day surfing the internet of having meetings.

You are make a false assumption that by easing rules to dismiss workers, companies will fire the unproductive oji-sans while hanging on to younger and more productive workers. I think, if anything, the reverse will be true. The older highly paid oji-sans are the ones in power and they are the decision makers about who stays and who goes. Do you honestly think that they will eliminate their own cushy jobs first? Fat chance of this ever happening, since these oji-sans usually have a delusional sense of their importance and a real sense of entitlement.

What is much more likely to happen is that the oji-sans will crack the whip even harder at the younger workers, since it is these younger workers who's status will be changed from regular to non-regular workers. This will give the old oji-sans even more power to bully, harrass and make them work un-paid overtime, since the younger workers will have even less job security than before.

1 ( +3 / -2 )

it will basically result in more hakkensha and less seishain. This is how companies want it, as it greatly reduces their overheads and liabilities.

1 ( +1 / -0 )

'May boost'? That is the basis of his economic reforms. Giving ultimate power to employers and screwing employees for every yen he can take off them. Think about last week's report about the black companies scabbing free labor from younger employees through unpaid overtime. There are no real worker's unions in Japan Japanese worker's union only litigate company directives and do nothing for the workers.

-3 ( +2 / -5 )

homleand: "I can't agree with the slant of this article. Abe's reforms are improving things for ordinary workers. There needs to be more fluidity in the labour force."

Umm... and how's that again? Where's the increased salary I was promised if he was elected? He sure was quick to increase taxes, though.

CanadianJapan: Everyone, including the author of this article, I'm sure, is aware of said oji-sans and the lack of need for them at the workplace, but show me aspects of Abe's plans that do not FAVOR said people, along with protecting dug in corporate heads, and I'll believe that that is what companies will do -- fire those that are not needed to give life-long employment to new and promising employees. I cannot see Abenomics as being anything but the destruction of Japan in the relatively near future. Given the current patterns of his and others' policies, the law will be abused and no one punished for it save the nation itself.

-1 ( +3 / -4 )

"A freer flow of labor - where easier firing allows easier hiring - would make for more robust and durable growth,"

It's already been tried in the West. It doesn't work. The result has been stagnated or shrinking real wages for workers. The squeezed workers spend less and so the economy, which is driven by consumption, stops growing.

7 ( +7 / -0 )

JSTOKYO,

Excellent point. I believe that is exactly what will happen if these "reforms" might be implemented.

Japanese working culture values length of employment, not efficiency. The ridiculous senpai/kohai system just enforces that even harder when useless, no-ideas longtimers can tell fresh-minded beginners how to work. I have experienced this myself, where people try to tell me "This is how we have always done it at this place", in so many words. That attitude is easier for a "newgrad" to conform to than an free-thinking, obnoxious "outsideperson".

-2 ( +3 / -5 )

JS, I am not sure. Many of the old guys greatly dislike each other and I am sure the top dog would be more than happy to get rid of a few of the oyajis that sit and do nothing. That being said, I agree that many would see it as a chance to crack the whip and be nasty.

Japan needs to seriously wake up and look at their lack of work/life balance and how untrained many of the workforce are. The skilled workers - engineers and the like - are safe and snug in their jobs but frankly, I'd question the skills of anyone who has come out of the Japanese university in the past 15 years and ask what their "expertise" is because I see very little training and skills at the universities here. On the job training for six months is costing them millions and if I were running a company, I'd be question the education of the recent grads and those in their 20s and early 30s.

And let's be honest, the people in this article don't sound as if they have much sought after skills and abilities. If anyone can do the job, anyone can be hired and right now, the cheapest wins. That means unskilled workers - usually women. Japan has made their worker disposable and now the country is paying the price for it.

-2 ( +1 / -3 )

Changing the law to enable companies to more easily adjust the size of their workforce might be important, but it will only work if companies change their attitudes and become more flexible and willing to hire for all positions. Without that, the government will only create a higher rate of unemployment, which in turn will mean it takes longer to find new jobs due to bottlenecks.

Look at what happened when the government tried to encourage job stability with its law that said if a contract worker is in a job for five years the company must offer him/her a permanent position if requested by the employee - they've simply started non-renewal of contracts after four years. And when business tax was cut to encourage salary increases companies just pocketed the extra and salaries haven't changed. So can we really trust companies to play their part in all this?

And those leaving one company for another are likely to be offered only contract worker (haken) terms, with a much lower salary offered and no pension or health insurance provided. This will continue the race to the bottom and will have a direct impact on families, education planning for their children, health cover and pension planning. Job instability will also be a disincentive to have more than one or two children, which will continue to shrink the population. It's a social time bomb.

No one likes lazy or incompetent workers, but society is kidding itself if it thinks only the bad workers will be fired. In the UK we now have food banks - food banks in 2013 for goodness' sake! - for hardworking people who are simply unable to earn enough to feed their families. Many of these recipients are NOT homeless or NEETS or drifters, they are people with houses and jobs (sometimes more than one) who are just struggling to survive on what they earn.

A race to the bottom serves no one's interests except the short-term profiteering of companies.

4 ( +4 / -0 )

Treating workers unfairly as in a huge income gap, denying them a reasonable income depending on the work they accomplish - remember equal pay for equal work, even across gender - denying them any kind of security is going to if not already backfiring in the form of lack of motivation, lack of productivity. There are probably many companies that think they can circumvent the coming crisis by relocating to cheap labor areas or they think there will be an endless supply of workers who will do anything for peanuts. They'll stick to their stifling policies until something gives. Labor reform is necessary, but not in a package that favors poorly, inefficiently managed companies with a bunch of geriatrics at the top. I hope Abe knows what he is doing if he is going to give companies a free hand in hiring and firing. That will give short shrift to hopes of a growing economy, especially in a time when the consumption tax is raised and we still see our tax money wasted on last minute useless, wasteful, aggravatingly unpopular public works in December.

-1 ( +0 / -1 )

'Abe's reforms are improving things for ordinary workers' Please give us your definition of 'ordinary'.

-1 ( +1 / -2 )

“In this society once you become a temp you will be a temp forever -"

Is there any way we could go back to the 70s and early 80s when the economy was booming, people worked temp jobs by choice, and a dollar bought 240 yen?

-1 ( +0 / -1 )

Abe's reforms are improving things for ordinary workers

Just has to be the dumbest statement of the week.

-1 ( +3 / -4 )

Umm... and how's that again? Where's the increased salary I was promised if he was elected? He sure was quick to increase taxes, though.

I don't recall Abe promising you or anyone else higher wages. And the tax hike was legislated and approved by the late DPJ administration furing they had their brief stint in power.

'Abe's reforms are improving things for ordinary workers' Please give us your definition of 'ordinary'.

The depreciation of the yen has helped my business a lot, and as a result, I have been able to increase hours and pay a little more to my people. I am not the only one who has done so.

That doesn't mean I think Abe is doing a good job, but among the choices available, he was the least bad. The politician with the ability to fix Japan does not exist.

0 ( +2 / -2 )

@tmarie, I disagree with your statement that women want low salaries. Being a fuhyo kazoku requires them to work utmost 5 hrs just like some of the pensioners. Those women don't want low rate per hr. Working for 5 hrs each day accounts for low monthly income. Those who are unmarried, widowed and single mothers( esp those who aren't on seikatsu hogo) who want to have a better monthly income can work for long hrs as long as OT's are provided.And with respect to pension and health care benefits, even temps are enjoying them. Though sometimes, the workers themselves are asking the haken kaishas not to include them as they hate the 3 man something deducted from their salaries. Only to realize later the great need when someone becomes ill. And lest be forgotten, those idle oyajis used to be putting in a lot of OTs and their youth and vigor in some forgotten yrs. Isn't it sweet for those companies to treat well the very people who made their companies prosper?

1 ( +2 / -1 )

Abe's reform will be nothing but filling AOKIGAHARA more rapidly and will see more Trains halt at station like Monzen-nakacho. Its better to stop calling Japan as Developed nation its now competing with developing nation which are doing much better than Japan

-1 ( +0 / -1 )

@tmarie, I disagree with your statement that women want low salaries.

Feel free to disagree. When you have a nation of married women who are wanting to stay under 1.3 million so they can be covered by their husband's pension and health care, the unmarried/widowed/divorced women get screwed. Of course the single women want decent pay but get overshadowed by those who are happy with the way things are because they benefit from it. They don't get the OT like the men because they are easily replaced by married women who don't want OT pay for fear of losing their "right" to their husband's benefits.

Why would anyone hire a women in an unskilled position and pay her a decent wage when they could hire a married woman and pay her peanuts and know she won't complain about not getting paid overtime? It is win/win for the companies. Low wages, free OT.

Just because someone worked OT 30 years ago doesn't mean they should be allowed to sit on their behind and do nothing now. The oyajis running the show right now are the same ones running this country into the ground. Overtime work doesn't equal productivity. Don't confuse the two. If these guys were so good at their jobs 30 years ago, the country wouldn't be in the state it is in now.

What would be sweet is if young people had job secure, were treated better and were productive. It would do the country a world of good.

0 ( +2 / -2 )

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