The government of Japan revised the Labor Standard Law in 1987, in order to reduce the work hours a week gradually from 48 to 40 hours. To achieve this goal, they advocated the adoption of the five-day work week, 20 paid holidays to be taken by all workers and a reduction of overtime work. As a result, the total annual working hours of Japanese industry was reduced to 1,728 in 2011 (1,904 hours in 1994), which is still more than that of France and Germany but about the same as the U.S.
Changes in Lifetime Employment
Foreigners still tend to believe the myth that Japanese people work for one company until they retire and that their wages are regularly increased, based on years they have worked for the same company. Even the Japanese themselves proudly believed this was one of the reasons for the country’s economic success. But this situation collapsed with the burst of the Japanese Bubble Economy. Although most companies still have seniority-based wage systems, more companies are starting to adopt ability-based ones. And many companies have started hiring more temporary employees to reduce costs. The percentage of non-regular workers was 36% in 2013, which means one-third of workers in Japan are in unstable employment conditions.
Until 1991, the unemployment rate in Japan was very low and stable. It rose gradually and it has been around 4 to 5% since then. Foreign people often comment that this rate is still lower than that of many other countries. But the way in which the Japanese calculate their unemployment rate must be taken into consideration. The unemployment rate in Japan does not include people who looked for a job but gave up. When these people are included, the Japanese unemployment rate jumps to more than 10%.
Japanese have long been known as hard-working people. Some Westerners used to criticize the Japanese as being workaholics who lived in rabbit hutches. This was partly true during the post-war period when people were urged to work in order to reconstruct the economy. Most people knew they could not afford to take long holidays until the economy caught up with those of the West. Today, many foreigners see Japanese on vacation in their countries all over the world. The Japanese government suggests companies give workers 20 paid holidays a year. But the number of paid holidays actually taken in 2010 was only 9.3 days out of the average 16.6 available. In France, their average paid holidays are 37 days, 34 of which are actually taken. Japan also has 15 national holidays a year.
College students usually start looking for jobs before they begin their senior year of school. First they choose companies they want to work for by taking company brochures and attending their employment-explanation meetings. Candidates are selected after their report cards and curriculum vitae are examined and they’ve taken an examination. After holding several examinations and interviews, companies make informal hiring decisions. Back in the 80’s, students would receive numerous letters from companies interested in recruiting them. Many students could choose the company they wished to work for. Due to the recent recession, however, students now receive fewer letters from companies and few companies even give them a chance to be interviewed. Some popular companies choose one employee from among thousands of applicants. Some students extend their graduation until the following year, hoping the situation will improve. This time has become known as the “super ice period for recruiting.” Among new college graduates in 2013, 20.7% of them were employed on an irregular basis.
There are about 55,000 labor unions in Japan with about 9.9 million union members that account for 17% of the total Japanese workforce. But one characteristic is that most unions in Japan are company unions, not trade unions, like those in the U.S. Consequently, the relationships between unions and management are more harmonious than hostile. Every spring, unions negotiate with management concerning wages and working conditions. This is called “shunto,” literally translated as “spring conflict.” But because the economy has been so slow recently, most unions are avoiding making demands and are more concerned with the ability of companies to secure their employment.