The change of employment system

In 1950’s, many economists and foreign business people underestimated the Japanese employment system. They supposed the productivity of Japanese labor must be low because companies placed more importance on years on continuous employment of labors than on performance of them. However, their evaluation had been changed during a period of Japanese rapid economic growth, and Japanese management system was highly admired by them since they noticed guaranteed lifetime employment and seniority system generate high loyal sentiment and solidarity, which makes high productivity. Due to this background, Japanese companies and Japanese were proud of the advantage of these employment systems, and these systems took a root in Japanese society.

Go back to the first topic.

Which system is better for worker?

“Seniority system vs Pay for performance system”,

“Guaranteed long-term employment with job changing vs Short- term employment with job changing”

It depends on workers. Someone who place importance on lifestyle stability desire Japanese employment system and others who are confident of their ability choose American employment system.  In case of Japan, most workers were former.

However, the demand for the employment system has been changed as Japan gets richer, and it means people work not only for their life but also for their happiness in these days. In addition, companies also desire the change of the employment system because they faced to the problem of the lacking of flexibility of labor market.  It is one of disadvantage of the Japanese employment system and created serious damage on Japanese economy under the recession since the system prevented companies from corporate restructuring for financial reform.

Next, I will focus on the Japanese labor market reform.

     

Japanese traditional labor enviroment

There are three significant reasons.

First reason is the traditional lifetime employment system. Most Japanese companies guarantees lifetime job security for every employee of a company, and they will not get fired even if their performance is poor. People who do not have enough capability to work in their company are called “Madogiwa-zoku” literary meaning “people who sit at the window”. It means there is not much to do but gaze absently out of the window. Obviously, this system has an advantage which strength their royalty due to long-term employment. In these days, this system is collapsing in this current recession and diversification of employment.

The seniority ranking system is also important factor. Seniority ranking system is that wage and position rise in accordance with age and length of work. Moreover, it is difficult to accept the situation that a person have boss who is younger than him, or a person has subordinate who is older because the idea of Confucianism in which people respect for the elderly is deeply rooted on Japanese culture. Considering this invisible cost, it is natural a company is not willing to hire a mid-career worker, and it can be said that this system is essential for Japanese society.

Simultaneous Recruiting of New Graduates, which companies hire new graduates all at once, is third reason. Due to this system, college students usually have to start participating in recruiting activities before they begin their senior year of school. If a college student does not find a job before graduation, the possibility of being a regular worker will dramatically decrease. The major advantage of this system is that companies save on the cost of induction course because similar new graduates join a firm all at once.

http://books.google.com/books?id=91s4n07d4p4C&lpg=PP1&ots=rfplt2AJiK&dq=Hegemony%20of%20homogeneity&hl=ja&pg=PP1#v=onepage&q&f=false

Job changing

I would like to blog about Japanese labor environment and labor market in this blog.  This topic is related to my research I did in last quarter, but the research is academic and may have nothing to do with our life. Thus, my research is boring for many people. That is why I will try to make my research interesting by using our immediate problem. Before I write about this topic, I will talk about myself.  I am an international student from Japan, and major in economics. I worked as a research assistant under Mr. Hoshi, a professor at IR/PS in UCSD, and researched about the effect of the amendment of dispatched worker low under Koizumi administration on Japanese labor market.

"What is the ideal labor environment for individuals and a society?"

I will explain a characteristic of Japanese labor market, and differences between U.S labor market and Japanese labor market in this week.

What kind of image do you have about “job change”?   Is it a good or bad?

In U.S, workers often change their job in order to improving their career or wage, so it is not unusual that a worker change his job in three years and do a variety of job.　On the other hand, the number of people who approved of changing job is few in Japan. So, “job change” is bad in Japan. Generally speaking, Japanese society discriminates a worker who quit last job and seek a new job. Hence, many people get a job after graduating a high school or a university and do not change their job until reaching the mandatory retirement.

There are three reasons…..