While traveling through Europe recently I tried to get a handle on the controversy surrounding France’s now abandoned First Job Contract (CPE) law, which was meant to make it easier for companies to hire young people. However, those same young people thought the law would make it easier for companies to exploit them since they could be fired more readily than under current laws.
The French didn’t come off well. The English language media in Europe characterized the student protesters as being naive and spoiled, the labor unions as being out-of-touch with economic realities, and the government as being either lazy or easily intimidated.
An editorial in the International Herald Tribune written by two officers of the Federal Reserve Bank of Dallas called France’s current labor laws “uncompetitive and a drain on the economy” and said that public reaction to the CPE showed how seriously the French people “misunderstood” the “globalizing economy.”
But from where I stood the reaction seemed to indicate that the protesters understand the global economy all too well.
Believing that all injustices can be corrected through social policy may be as much of a fantasy as the gospel that says the market is God, but the rights of workers cannot be compared equally to the rights of stockholders. And in the global economy, stockholders always come before workers.
In order to put the issue in perspective, I tried to imagine the parallel situation in Japan, where the media also characterize young people as being naive and spoiled, though you won’t find any students here manning the barricades for job security.
However, that subset of youths not in employment, education or training (known as NEETS) are mostly a figment of the media’s imagination.
NEET is an acronym coined in Britain in the 1990s to describe teenagers who were not employed or in school. According to University of Tokyo Assistant Professor Yuki Honda, who has co-written a book titled “Don’t Say NEET,” the term has been adopted in Japan to represent the social and cultural malaise that is thought to have gripped the country. This thinking says that young people, specifically those in their 20s, are eating away at Japan’s national wealth by laying around their parents’ homes and working only the occasional part-time job.
As Honda points out, there have always been such young people, and if their numbers seem to be on the increase it has less to do with attitudes than with the nature of full-time employment, which has changed significantly in the last 15 years and will change even more in the near future. While French youths, raised in a culture of anti-elitist idealism, rage against their government for not protecting future jobs, Japanese youths, who have been raised in a culture of deference to authority, understand instinctively that no one is going to protect them.
For about a decade the Japanese government has been loosening its labor laws. Companies that were forced to restructure in the 1990s demanded more flexibility in hiring, so the government expanded the number of job types that could be covered by temporary workers. The result has been a steady erosion of wages, since companies who hire temps deal with agencies rather than with unions or the workers themselves. They ask for lower wages and the temp agencies accommodate them.
According to a recent Asahi Shimbun series on labor laws, the average wage for a temp worker in 1994 was 1,704 yen an hour. Now, it’s 1,309 yen. On average, a full-time temp worker takes home about one-third the pay of a full-time company employee. But full time employees may lose even that advantage if the government and business community have their way.
Last June, the Japan Federation of Economic Organizations (Keidanren) proposed that regulations standardizing the 8-hour workday be eased.
The idea is based on the so-called white-collar exemption, which in America means that managers and most administrative workers are not protected by the same laws that protect laborers. In practice, what this means is that Japanese companies will no longer be compelled by law to pay office workers overtime if they put in more than eight hours; which in turn means that companies will be able to compel workers to stay at the office longer without adding to their labor costs. In the only country in the world that has a word for “death from overwork” (karoshi), such a development is chilling.
But there’s more. Next year, the government plans to submit a bill to the Diet for a Labor Contract Law, which will allow any company to set its own labor standards.
The bill will include the formation of a special commission that ostensibly protects workers’ rights, but such a law would in effect eliminate labor unions since it’s unlikely employers would allow collective bargaining clauses in their employment contracts.
At present, anyone who is fired for reasons they believe are unfair can take their employer to court. That option would probably become more difficult under the Labor Contract Law.
This sort of liberalization is already underway. In a recent article, Shukan Kinyobi described a taxi company in Fukushima Prefecture that has implemented a total commission system. The bottom line is that the drivers are on average making less than the minimum wage; or, at least, they are when they get paid. Most of the time their pay is delayed. Though the legality of the system is questionable, the local Labor Standards Bureau is reluctant to get involved.
So while the globalists and economic pundits see the French students as ostriches with their heads in the sand, to others they may look like heroes. The French, as it were, refuse to be Japanese.