Labour market of Japan

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Labor market of Japan

The structure of Japan's labour market was experiencing gradual change in the late 1980s and was expected to continue this trend throughout the 1990s. The structure of the labor market is affected by the aging of the working population, increasing numbers of women in the labour force (see Working women in Japan), and workers' rising education level. There is the prospect of increasing numbers of foreign nationals in the labour force. And, finally, the labor market faces possible changes owing to younger workers who sought to break away from traditional career paths to those that stressed greater individuality and creativity (Freeters).

Workers' Changing Attitudes

The success of corporations in Japan is attributable to the remarkable motivation of its workers. Also behind this corporate prosperity is the workers' strong sense of loyalty to and identification with their employers. While many theories have evolved to explain the extraordinary attitude of Japanese workers, perhaps the most noteworthy is that of personnel management. This view holds that loyalty to the company has developed as a result of job security and a wage system in which those with the greatest seniority reap the highest rewards. Such corporate structure presumably fostered not only a determined interest in the company but also a low percentage of workers who changed jobs.

During the postwar economic reconstruction, the backbone of the labor force was, of course, made up of people born before World War II. These people grew up in a Japan that was still largely an agriculturally based economy and had little material wealth. Moreover, they had suffered the hardships of war and had accepted hard work as a part of their lives. In the late twentieth century, these people were being replaced by generations born after the war, and there were indications that the newcomers had different attitudes toward work. Postwar generations were accustomed to prosperity and were also better educated than their elders.

As might be expected, these socioeconomic changes have affected workers' attitudes. Prior to World War II, surveys indicated that the aspect of life regarded as most worthwhile was work. During the 1980s, the percentage of people who felt this way was declining. Workers' identification with their employers was weakening as well. A survey by the Management and Coordination Agency revealed that a record 2.7 million workers changed jobs in the one-year period beginning October 1, 1986, and the ratio of those who switched jobs to the total labor force matched the previous high recorded in 1974 (one year after the first oil crisis). This survey also showed that the percentage of workers indicating an interest in changing jobs increased from 4.5 percent in 1971 to 9.9 percent in 1987.

Another indication of changing worker attitudes is the number of people meeting with corporate scouts to discuss the possibility of switching jobs. Corporations' treatment of older workers also affects attitudes: there are fewer positions for older workers, and many find themselves without the rewards that their predecessors had enjoyed.

Foreign Workers

Traditionally, Japan has had strict laws regarding the employment of foreigners, although exceptions were made for certain occupational categories. Excepted categories have included executives and managers engaged in commercial activities, full-time scholars associated with research and education institutions, professional entertainers, engineers and others specializing in advanced technology, foreign-language teachers, and others with special skills unavailable among Japanese nationals.

Despite the now-reversed upward trend in the unemployment rate, many unpopular jobs go unfilled and the domestic labor market is sluggish. Imported labor is seen as a solution to this situation by some employers, who hire low-paid foreign workers, who are, in turn, enticed by comparatively high Japanese wages. The strict immigration laws are expected to remain on the books, however, although the influx of illegal aliens from nearby Asian countries (China, South-East Asian and Middle-Eastern countries) to participate in the labor market is likely to increase.

Japanese companies have also established foreign subsidiaries to profit from low wages overseas. This trend started in Singapore in the 1970s. The outsourcing helped to build local infrastructure and started a technological transfer, and some of the former subsidiaries and joint ventures developed into fierce competitors.

In the 1980s, the strong Yen allowed Japanese companies to buy several American firms, adding a large American workforce to Japanese companies. The crisis of the 1990s, the lost decade, reversed the process, and western companies were buying major stakes in big Japanese companies, especially car makers. The process became like that of the 1980s by the early 2000s, when the country experienced a major recovery under the Koizumi administration. During that time, western stakes were greatly reduced or eliminated.