Less work, more play to lift economy: DPJ

by Akiko Ikeda and Satoshi Kawano

Bloomberg

Yukio Hatoyama’s Democratic Party of Japan swept to power last month with the promise to revive the nation’s moribund economy. One way to do so may be to stop people from working so hard.

Households have saved up about ¥1.41 quadrillion in financial assets, yet workers use less than half their paid holidays. Getting them to take all their time off would create 1.5 million jobs and pump ¥11.8 trillion a year into the economy, according to 2002 estimates by the Ministry of Economy, Trade and Industry.

A quirk in the calendar will soon test that spending boost. For the first time, the nation will have a five-day break in September that the media have dubbed “silver week.” Bookings for domestic tours this month rose 11 percent from last year at Kinki Nippon Tourist Co., said Eiko Sato, spokeswoman at Japan’s second-largest listed tour agency by revenue.

“Promoting longer paid holidays is an effective way to expand domestic demand, not only in the travel industry but in retail as well,” said Yoshiki Shinke, senior economist at Dai-ichi Life Research Institute. “Legislation and an awareness campaign for companies are necessary” to get people to take all their holidays.

Silver week is a result of the “Happy Monday” law in effect since 2000, under which a holiday falling on a Sunday is carried over to Monday, and any day sandwiched between two holidays also becomes a holiday. This year, workers get a five-day break starting Sept. 19.

The DPJ, which will form a new government next week after winning the general election on Aug. 30, said it intends to tap the spending power of holidaymakers through legislation aiming for better “work-life” balance.

“We need to create a society where people are not forced to work long hours and are able to take necessary time off,” the DPJ says on its Web site. “We will promote legislation that allows people to take longer leave.”

Employees tend to take time off only when their employers close for business, such as during the Golden Week cluster of national holidays in spring or during Bon in August, when families gather to honor their ancestors. Workers take only 48 percent of their annual leave, according to Health, Labor and Welfare Ministry.

The government has sought to counter this trend and spur domestic spending by mandating holidays. This year workers will have 16 national holidays, compared with five in France, seven in Italy and 11 in the United States. Japan had 11 national holidays in 2000.

Increased domestic travel could bolster regional economies, which have suffered disproportionately during the nation’s worst postwar recession as investment and wealth were concentrated in big-city centers. The nation’s jobless rate rose to 5.7 percent in July, and monthly wages, including overtime and bonuses, dropped 4.8 percent from last year after falling a record 7 percent in June.

“Longer paid holidays would have a significant impact on the travel industry and that would stimulate economic restructuring of battered regional economies,” said Hirotaka Yamauchi, dean of the Faculty of Commerce and Management in Hitotsubashi University.

Masao Inaba, 55, who runs his own business, will take his wife to Hokkaido for silver week.

“The business environment was tough, so we didn’t go anywhere during Golden Week, but we’ll splurge this month on our first trip to Hokkaido,” Inaba said.

Still, the longer holiday and cheaper fares may benefit overseas destinations more than Japan. Bookings for foreign package tours this month rose 51 percent from a year earlier, according to a July 15 report from the Japan Association of Travel Agents, spurred by cheap deals.

A five-day, four-night Bali tour offered by Kinki Nippon Tourist Co. cost ¥131,800 during silver week, less than the ¥170,800 at Bon. Four days in Hawaii ran to ¥182,800 compared with ¥236,800 at Bon, said the agency.

“I had given up plans to go abroad this summer, because my company is restructuring and my bonus plunged,” said Yoshiyuki Kawashima, 30, an employee at an ad firm. “But when I saw how cheap tour prices are, I decided to take my girlfriend to Bali.”