The mindset of workers who will always have low salaries

By Casey Baseel

Despite Japan’s famously strong work ethic, even offices here have some employees who coast through the day, oblivious to their more industrious co-workers who exasperatedly wonder how their paychecks remain so similar when their levels of dedication are anything but.

Economist Taiichi Kogure touches on some of these points in his latest work, "The Mindset of People Who Will Always Have Low Salaries," which hit bookshelves in Japan last month. Inspired by the book, Livedoor News posted the following editorial analogy based on Kogure’s concepts, titled “Your Salary Isn’t Determined by Your Efforts or Value.”

Imagine two young salarymen employed in a mid-sized company. Tanaka worked all month without a singe day off, doing overtime until the wee hours of the morning, selflessly working like a man possessed for his company. On the other hand, his coworker Yamada, who started working at the company at the same time, spent the month preoccupied with juggling his three girlfriends, using his work computer to send them private emails, and dashing out of the office as soon as the second hand on the clock hit quitting time.

A few years pass, during which Tanaka makes a name for himself as someone management can trust and depend on. At this point, we could go so far as to say the amount of profit Tanaka has brought to the company, as well as the number of hours he has put in working, are several times those of Yamada.

So how has this affected their salaries? Since Tanaka’s contributions to the company are several times Yamada’s, is Tanaka’s salary several times bigger as well? If Yamada is drawing 300,000 yen a month, is Tanaka raking in 600,000 or 900,000?

Right now anyone who’s worked in an office is saying, “Of course not.”

And they’re right. Actually, the difference between Tanaka’s and Yamada’s salaries is just a little over 10,000 yen a month.

This isn’t a rarely seen tragedy, either. We see it all the time in the business world. Even still, there’s no shortage of people who this ordinary occurrence doesn’t sit well with.

Shifting gears, let’s think about two beverage manufacturers. One of them release a fruit juice that’s incredibly delicious. At the same time, the other puts out an ordinary-tasting vegetable juice. A few months later, the tasty fruit juice has become a big hit. It flies off store shelves as fast as the company can stock them. On the other hand, the vegetable juice’s mediocre taste results in nothing more than mediocre sales.

The ostensible purpose of producing these beverages is to satisfy the people who drink them, and it now seems safe to say that the fruit juice has earned much more of that satisfaction than the vegetable juice has.

So how does this disparity affect their sale prices? The fruit juice made people far more people satisfied, so does it cost far more than the plain old vegetable juice?

And now, anyone who’s ever bought a carton of juice is saying, “Of course not.” And indeed, both varieties of juice have the same price of 150 yen.

So why doesn’t this rub anyone the wrong way? Regardless of how great or terrible the product tastes, we accept that it’s not going to move too far away from the market price for juice of 150 yen.

The key point in comparing these stories of salary and juice is to see which of their respective factors correlate to each other. It’s easy to see that Tanaka is the delicious fruit juice, and Yamada is the ordinary vegetable juice. There’s also no fallacy in thinking of their salaries as the prices of the two varieties of juice. But what do our salarymen’s amount of effort, and also the amount of profit they bring to the company match up with in our juice analogy?

The proper perspective is that their labor corresponds to the juices’ flavors, and the profits correspond to the pleasure experienced by the juice drinkers. By examining the situation this way, we can grasp the logic that dictates that their salaries are not determined by how hard they work or how much they earn for the company. In short, the answer to the question of what determines their salaries is their market value as workers.

Once we understand this, the indignation we feel by looking at a lazy coworker and seething, “I work harder than he does, so why are our salaries the same?” can be seen for what it really is: misdirected.

Of course, this isn’t to say that effort is meaningless, nor that you’re better off slacking off. The title of this editorial may be “Your Salary Isn’t Determined by Your Efforts or Value,” but we could just as accurately say that your value as a worker isn’t determined by your salary.

Source: Livedoor News

Read more stories from RocketNews24. -- 24% of Workers in Japan Have Less Than $2.84 to Spend on Lunch -- Housewives: Why Carefully Managing Your Husband’s Money Leads To A Happier Home -- The Top 10 Things Men Say While Out Drinking That Make Their Coworkers Hate Them

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In the company example Tanaka will be raking in the overtime payments that his company surely pays and he will be financially better off (until he gets promoted and the overtime payments stop). Of course, Tanaka will eventually drop down dead from overwork whilst Yamada is out carousing with his three girlfriends. So in the long run Yamada will do better financially too, earning a salary for longer and drawing a pension long after Tanaka is in his grave.

In the juice example the company making the fruit juice might make more profit as they are selling more units.

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In the company example Tanaka will be raking in the overtime payments that his company surely pays

Uh, wasn't aware that Japanese workers get overtime pay.

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The first part of the article is both interesting and accurate but the salary/juice analogy is absolutely ridiculous. Product pricing strategies and merit-based employee compensation are about as similar as potatoes and astronomy. Microeconomics dictates a specific profit maximization strategy, with (consumer) demand and pricing being the two cornerstones. Industrial psychology focuses on such things such as employee performance, motivation, job satisfaction, and other such things. Also, how was the title of the article decided? The article doesn't even address this issue. It sounds like the author needs to review his notes from Writing 101!

2 ( +3 / -1 )

Across the board wage stagnation of the kind that applies in Japan doesn't apply to nearly as great an extent in other industirialised countries. I wouldn't dream of describing it as unique, but it is certainly atypical

So are we to believe that Japan has a more pure form of market economy that those that exist elsewhere? Clearly this was not always so. In days of yore, the true company loyalist indeed received their reward, provided that they were also reasonably astute in their personality politics.It is only in recent times that this has ceased to be the case. Is that, then, because Japan has 'recently' become a more pure market economy, or is it simply that companies these days aren't makiing enough profits to provide their best workers with decent careers.

If Mr Tanaka is not being adequately rewarded, he should be reassessing his loyalties, not his motivatioin.

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Japanese workers who continually bend over without complaining deserve everything they get.

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What a pointless, patronizing and depressing article. Who subscribes to this forced homogenization mindset?

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Product pricing strategies and merit-based employee compensation are about as similar as potatoes and astronomy.

They're the same in principle. You can buy some OK generic brand soda for $1.25, or better soda for $1.50. you can hire an OK employee for $30k, or a better employee for $31k. It doesn't matter how much better they might be, that employee is still filling the niche of his position and is therefore worth not much more than the market value of his position. If he proves to be better suited for a more valuable position, like management or something, then the company will realize this and move him into that position, where he will be worth about as much as the market rate for managers.

Soda is a good, labor is a good. The same economic laws apply to both markets.

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By the title of the article I do get the impression that the author [and Mr. Kogure] probably disagrees with the analogy posted by Livedoor News. No matter, the analogy is incredibly flawed and should have been called out as begging the question.

As a matter of fact products of different quality/popularity DO cost different prices... the soft drink/juice analogy was particularly unfortunate since vending machines can be found every 50 meters in Japan. Go ahead and walk to your closest vending machine and compare the prices for yourself. Companies who work harder to market more effectively to their demographics are rewarded by demand for their product, and therefore [within reason] can sell their product for higher prices than less popular competitors. This is basic economics of supply and demand.

Aside from the flawed analogy it IS true that Japanese salaries rarely reflect the actual quality of an employee. This is damaging as it removes the incentive for people to better themselves (better does not equal working long hours folks). It stifles the drive to improve skill/efficiency to become a better employee that can contribute more value to the company. This leads to apathetic, disengaged, and sometimes outright depressed employees.

Think about it, [in the absence of being brainwashed] why in the world would anyone break their neck for a company that has no interest in rewarding them for their extra effort? Almost nonsensically a good Japanese employee is rarely one who takes it upon themselves to decide what areas they should improve or excel in; that is the company's decision - the responsibility of the worker is to fall in line and respect the chain of command. Anyway, in Japan employees who 'think outside the box' are often seen as troublemakers rather than creative collaborators who add value. In fact thinking too far outside the box or even constructively criticizing the company can get you ostracized or worse.

The sad thing is that from the Japanese company's point of view your meager base salary IS the reward (and I'm not even getting started on the corrupt bonus system); Over the years I have gotten the impression that they think you should feel lucky just to be a part of their company. Sadly the mentality of the average Japanese person is likely to give into this kind of bullying. Culturally you are expected to put the company first over everything else; those who don't are considered selfish and lazy. This is one of the reasons why in recent decades Japan has failed to compete with the West and even other Asian countries like Korea and Taiwan, whom have been steadily chipping away at Japan's profits since the 90s.

As a resident here I want to see Japan succeed, but they really make it hard on themselves sometimes.

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