Japan’s unemployment rate remains disturbingly high, as companies step up job-cutting efforts and bankruptcies increase. Although there are signs that the economy is recovering, there are no indications that the serious job shortage is easing. The Federation of Employers Associations, in recent negotiations with major labor unions on annual wage hikes, proposed a work-sharing program to create more jobs.
Management and labor have yet to agree on details of the work-sharing plan, but companies face mounting pressure to reduce overtime, especially unpaid overtime, to create more employment opportunities. Many management-track corporate employees work long hours without overtime pay, often out of loyalty to their employers or devotion to their jobs.
The horrors of unpaid overtime were exposed during recent court proceedings over a damage suit filed by the parents of a dead employee at the advertising giant Dentsu Ltd. The 24-year-old man worked marathon hours without overtime pay, through the night until 6:30 a.m. on some days, when he slept only two hours. Suffering from fatigue and depression, he committed suicide.
The Supreme Court ruled late last month that Dentsu was entirely responsible for the worker’s death, rescinding an earlier decision by the Tokyo High Court that the man himself and his parents also had some responsibility for taking care of his health.
A survey taken by Rengo, the Japanese Trade Union Confederation, shows that 50 percent of the respondents — and 60 percent of those working at big companies with more than 1,000 workers — sometimes worked overtime without pay. Unpaid overtime, which violates the Labor Standards Law, is rampant as a result of the negligence of the Labor Ministry and that of labor unions, too. Dentsu’s labor union failed to take any action over the long overtime hours the young man was putting in before he died.
Japanese labor unions, which are mostly company unions, tend to avoid confrontations with management. It is only natural that there are increasing calls for reducing overtime to promote the work-sharing plan at a time when the nation faces an unprecedented job shortage.
The Socioeconomic Productivity Center, made up of employers, labor union representatives and intellectuals, estimated in a report published last summer that if unpaid overtime were eliminated, 900,000 new jobs would be created; if all overtime were abolished, an additional 1.7 million jobs would become available. The center is expected to release its final report this summer, which I hope will lead to the correction of corporate Japan’s dependence on overtime.
There is also a disturbing development that could lead to the legalization of unpaid overtime. This involves a system under which corporate professionals are free to set their own working hours. They would be paid according to their job performance, their special knowledge, skills and creativity, and would not receive overtime pay. The system, which initially covered 11 job categories such as technology experts and certified public accountants, was expanded under the revised Labor Standards Law April 1 when business research and planning experts were added to the list.
According to a Rengo survey of companies that adopted this system, 60 percent of the respondents said there was no change in their working hours after it was introduced. However, 33.7 percent of the respondents said their actual workhours increased, while only 6.8 percent said their hours decreased. None of the respondents with a nominal workday of seven and a half hours or less said they finished working within hours.
Another problem is low overtime pay. Workers are usually paid 25 percent extra for overtime in Japan, compared with 50 percent extra in the United States. Under these circumstances, it is unconscionable that unpaid overtime is rampant.
Japanese workers are also reluctant to take paid vacations. According to a 1998 Labor Ministry survey, workers at companies with a workforce of more than 30 used an average of only 51.8 percent of their allotted vacation time, down from 56.1 percent in 1993. This suggests that companies’ job cuts are making it increasingly difficult for workers to take time off.
Western workers are required to use up their vacation time. Vacation time for bank employees is essential for checking on the possible misappropriation of bank funds.
Some Japanese companies now require their workers to use all of their vacation time according to prearranged schedules under management-labor agreements, but these account for only 20 percent of all companies. I hope that such arrangements will become more common in the coming years to help create more jobs.
The International Monetary Fund, in its latest World Economic Outlook, predicted that Japan’s economic growth in 2000 will reach 0.9 percent, down 0.6 points from the previous forecast announced last September. The IMF says the Japanese economy continues to stall. Amid the job shortage, consumers are tightening their purse strings, slowing economic recovery. To increase employment opportunities, management and labor should join forces to eliminate unpaid overtime and encourage workers to take more time off.
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