The Japanese Employment System Essay, Research Paper
One of the unique and well known features of the Japanese
employment system is permanent employment for workers. Japanese
corporations responses to recessionary periods provide an opportunity
to sort out the myths from the realities of the Japanese permanent
employment system.
During recessions Japanese companies forced to reduce their
costs achieve reductions in several ways. First, they reduce the
number of women and temporary workers they employ. During the
recession that followed the 1973 oil shocks female employment dropped
by eleven percent; more then five times the drop in male employment.
It was easy to reduce female employment because women even if they
hold permanent positions are thought of as transitory workers who will
leave the workforce when they get married. Female and temporary
workers are a safety valve for Japanese companies that allow
them to reduce costs in the short-term without firing permanent male
workers. The second way Japanese companies reduce costs is by giving
early retirement to senior workers at the company. Many of these
workers forced into early retirement then take up farming as is the
custom in Japan for retires. Getting rid of senior workers is one the
most effective tools companies have of reducing costs because these
workers have more seniority and thus make more money then the average
worker. Japanese companies also are able to cut costs during
recessions by reducing or eliminating bonuses paid to workers, cutting
down on hiring of new workers, eliminating the farming out of work to
subcontractors, transferring workers internally with in the company to
subsidiaries, and reducing profit margins to levels that many American
companies would find intolerable.
Japanese companies response to recessions shows the benefits
and disadvantages of their employment system. Some of the benefits are
that loyalty and labor relations are very good. This is due to the
fact that for non-temporary male workers not yet near retirement age
companies make a great effort to continue the permanent employment
system even during recessions. Most young male workers once entering a
company stay with it for their entire life and for them Japans
permanent employment system serves them well. These workers come to
view their company as almost a benevolent parent; the company leads
them through fitness drills, training camps, and retreats. A workers
identity is shaped not by their individual title but by the company
they belong to. But, female, temporary, and senior workers wind up
paying the price of this permanent employment system. Women who want
to work in a long-term position for a company lose their jobs when
recession hits. And because many women who lose their jobs become
housewives and don’t apply for unemployment insurance they become the
invisible unemployed, uncounted by labor department statistics. The
“permanent” employment system in Japan is only a permanent
employment for non-temporary male workers not near retirement age,
during recessions when companies are forced to cut costs mostly
female, temporary, and elderly workers wind up loosing their jobs.