Japan should crack down on excessive unpaid overtime in order to boost productivity, as the nation's irreversible labor shortage means companies must streamline to cope with fewer people, according to Goldman Sachs Group Inc. chief Japan economist.
"A small portion of overtime goes into the pay slip and I think the government should put a greater focus on unpaid overtime," Naohiko Baba said in an interview Wednesday. "When you crack down on unpaid overtime and shift the focus to work-and-life balance, it will make it easier for people to enjoy leisure hours and spend their money."
The government is seeking to raise labor productivity to help cope with a shrinking population, and limiting overtime is part of that. That was brought into sharp focus after the suicide of an employee of the nation's largest ad agency in 2015, but the extent of the problem is partly hidden.