NEW YORK – The same problems come up again and again in discussions of what Japan needs to do to revive its economy. The first is low white-collar productivity. The second is population aging. The third is gender equality. Now the government is poised to attack all three problems at once, undertaking an assault on one of the central features of the country’s corporate culture — long working hours.
Japan is legendary for its work ethic. You wouldn’t know this from the official statistics, which show Japanese working hours converging with U.S. levels:
I suspect the Japanese numbers are understated. Many more salaried workers in the United States are exempt from overtime rules than in Japan. Therefore, Japanese bosses have a bigger incentive than their U.S. counterparts to force their white-collar employees to work off the clock. In any case, surveys find that unpaid overtime is significant. Additionally, much of Japan’s working hour decline comes from a compositional shift from full-time to part-time work — in other words, underemployment. Full-time workers in Japan still work longer than their U.S. counterparts.
The harm from long working hours goes beyond stress, psychiatric issues and health problems. Overwork might also be a factor behind the country’s low productivity. Stanford economist John Pencavel has shown that if people work more than 60 hours a week, their output flatlines or even declines. Putting in long hours might convince your boss that you’re a diligent employee, but after a point it becomes self-defeating.
But the biggest consequence of overwork could be its destructive impact on family. In Japan, the tradition of eating dinner with the family is long gone. Many full-time workers — men in particular — don’t get home until late at night. That makes child care almost impossible for households with two full-time earners. Women are thus forced to choose between career and childbearing, which contributes to the low fertility rate and aging population. And since women are far more likely than men to choose to stay home with the kids, the culture of long work hours also keeps women from advancing in the workplace.
So Japan’s long hours hurt the economy, personal health and families, all for little economic benefit. Something needs to be done. Fortunately, the administration of Prime Minister Shinzo Abe is aware of the problem, and is taking some steps to address it.
First, Abe is drawing up new rules to cap overtime hours. These will only be effective if they are enforced, of course. But according to economist and government policy adviser Akiko Kamesaka, the government is preparing to send inspectors to make sure that office lights are off after certain hours. That kind of top-down policy might seem unthinkable to many in the U.S., but it might be the only way to force hidebound, aging Japanese managers to change.
Another idea is to nudge Japanese companies to let employees take their work home with them. Japan has traditionally lagged other rich countries in allowing workers to substitute working at home for office time, and Abe’s advisers have long been suggesting ways to fix the disparity through deregulation and bureaucratic pressure on businesses. Already, government efforts and natural cultural change seem to be having an effect — more than a third of large Japanese companies recently claimed to be implementing work-from-home systems.
These reforms, if successful, will have at least two big positive effects. They will force conservative Japanese managers to change their mindset regarding work itself — bosses will have to find ways to get their employees to work smarter, not harder. The changes will also benefit Japanese families, allowing parents to be home with the kids while they work. That will make child care easier (increasing the fertility rate), and will help women win economic equality.
In the long run, shorter hours for full-time employees could also help close the gap between full-time and part-time workers. As things stand, the employment system is hugely unfair, since it’s very hard to switch from the dead-end part-time track to the upwardly mobile full-time track.
But if full-time employees work more reasonable workweeks, companies will have less reason to maintain two different kinds of employment. That could give the government an opening to push companies toward providing equal pay for equal work, something Abe himself has advocated.
So Japan may finally be addressing its most infamous corporate-culture problem. The days of the exhausted salaryman nodding off on the midnight train might soon be gone for good, replaced by a new emphasis on efficiency, productivity and family time. It would be a welcome change.
Noah Smith is a Bloomberg View columnist. He was an assistant professor of finance at Stony Brook University, and he blogs at Noahpinion.
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