Japan Avoids Drastic Moves on Labor Rules in New Zones

By: TAKASHI MOCHIZUKI
Published Oct 18m 2013

http://online.wsj.com/news/articles/SB10001424052702304864504579143193924339218?mod=WSJ_World_LEFTSecondNews

Summary

In addition to monetary easing and fiscal stimulus, Japanese Prime Minister Shinzo Abe has proposed relaxing regulations in “special economic zones.” Businesses are seeking more extensive measures, including a “white-collar exemption” from some restrictions on working hours for those in senior positions in the special zones. The plan did not include the exemption, arguing that it could result in employees being forced to work extended hours without compensation. The government said that it will discuss the proposed measures early next year. An official who asked not to be identified admitted that compromises had to be made in order to keep the process of making economic zones going. Also included in the package are guidelines laying out conditions for hiring and dismissal in the economic zone, and the extension from five years to ten of the maximum term allowed for non-permanent employees. The demand for non-permanent employees will likely increase in the run up to the 2020 Tokyo Olympics. Currently, companies are required to hire certain contract workers permanently after five years if the workers request it, or not renew their contracts. The extension applies to “professionals with expertise” legislation is in the works to implement the measure nationwide. One of the goal of the guidelines is to make Japan’s mostly unwritten employment rules clear, and officials stressed that the government would help companies and workers understand them. Employment contracts cleared by the guidelines would be respected by the courts. Another goal is to clarify the rules so that foreign companies won’t hesitate to do business in Japan, according to Yoshitaka Shindo who is in charge of the economic zones. It is also proposed to allow private companies to run schools, and bringing in more foreign doctors and nurses to serve non-Japanese residents. More details including likely locations of the zones should be available by January. Among other proposals being heard, Tokyo and Osaka request that they be chosen as special zones with the corporate tax set below 20%, which is significantly lower than the current rate in Tokyo of 38.01%, and would be more competitive with Singapore’s and Hong Kong’s rates.

Commentary

In looking for some perspective to this article, I came across a couple of blog articles which describe working culture in Japan from the point of view of Westerners working in there. They are older articles which, I think, illustrate that the culture seems to be slowly changing.

The first is from a site called <3Yen, and was published in February of 2005. I can’t find a name associated with the article but it is apparently written by someone who worked for some time in Japan. I won’t summarize the article here, but if you’re interested you can access it here.

What I learned in this article boils down to two terms: The first, Saabisu zangyo, means service overtime. In other words, employees voluntarily working, without compensation, beyond the government imposed limits on working hours. Saabisu zangyo is deeply ingrained in Japanese culture and is expected in order to show loyalty not only to the company but to Japan itself. The second term illustrates the depth of commitment to the idea of saabisu zangyo, the word karoshi essentially describes death by overwork.

The second article was published in August of 2010, and was written by Caroline Pover, a British author and publisher who divides her time between Japan and the UK. Here’s a link.

Her article describes her efforts to blend her own work philosophy: If you can’t get your work done in a reasonable time, you’re doing it wrong or have too much (That’s paraphrased), with the Japanese work culture of long hours and cultural demands of social/work events. She also describes the strain these traditions place on Japanese family life.

A CNN Money article found here discusses other measures Prime Minister Abe is attempting to put in place to address the nation’s debt and stimulate the economy. Abe proposes a combination of increased taxes and economic stimulus including building and repairing infrastructure and preparation for the 2020 Olympics.

Sound familiar? It appears to me after my, admittedly, limited research that the US is not alone in our economic woes. It also appears that we have in common governments that hold fast to the idea of throwing money at problems. Money that is, of course, not theirs to begin with but which is collected from their people. Another similarity I see with the US government is the tendency to take a long time to do anything. “We have a problem, let’s…talk about it. Pencil it in, say…January?”

To bring my musing back to what I’m supposed to be commenting on, it appears from the Wall Street Journal article that the government is trying to simultaneously encourage foreign businesses to establish offices in Japan, and change the work culture by regulating work hours and requiring overtime be compensated. This is a good thing, however I would like to see more of these cultural changes come from the people themselves as well as their businesses. I’m generally skeptical when a government announces that it’s doing something to simplify and/or clarify. The result is usually anything but simple and clear. Personally, I’m for as little regulation as possible on businesses, but I also recognize that some oversight is a good thing especially in a culture that has a word for “worked to death.”

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About helpterriout

I'm fifty years old, married with three kids and two grandkids. After losing my customer service job in 2008, I've gone back to school. Right now, that's the main focus of my life.
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