The Japanese Employment System Essay Research Paper

One of the unique and well known features of the Japanese

employment system is permanent employment for workers. Japanese

corporations responses to recessionary periods provide an opportunity

to sort out the myths from the realities of the Japanese permanent

employment system.

During recessions Japanese companies forced to reduce their

costs achieve reductions in several ways. First, they reduce the

number of women and temporary workers they employ. During the

recession that followed the 1973 oil shocks female employment dropped

by eleven percent; more then five times the drop in male employment.

It was easy to reduce female employment because women even if they

hold permanent positions are thought of as transitory workers who will

leave the workforce when they get married. Female and temporary

workers are a safety valve for Japanese companies that allow

them to reduce costs in the short-term without firing permanent male

workers. The second way Japanese companies reduce costs is by giving

early retirement to senior workers at the company. Many of these

workers forced into early retirement then take up farming as is the

custom in Japan for retires. Getting rid of senior workers is one the

most effective tools companies have of reducing costs because these

workers have more seniority and thus make more money then the average

worker. Japanese companies also are able to cut costs during

recessions by reducing or eliminating bonuses paid to workers, cutting

down on hiring of new workers, eliminating the farming out of work to

subcontractors, transferring workers internally with in the company to

subsidiaries, and reducing profit margins to levels that many American

companies would find intolerable.

Japanese companies response to recessions shows the benefits

and disadvantages of their employment system. Some of the benefits are

that loyalty and labor relations are very good. This is due to the

fact that for non-temporary male workers not yet near retirement age

companies make a great effort to continue the permanent employment

system even during recessions. Most young male workers once entering a

company stay with it for their entire life and for them Japans

permanent employment system serves them well. These workers come to

view their company as almost a benevolent parent; the company leads

them through fitness drills, training camps, and retreats. A workers

identity is shaped not by their individual title but by the company

they belong to. But, female, temporary, and senior workers wind up

paying the price of this permanent employment system. Women who want

to work in a long-term position for a company lose their jobs when

recession hits. And because many women who lose their jobs become

housewives and don’t apply for unemployment insurance they become the

invisible unemployed, uncounted by labor department statistics. The

“permanent” employment system in Japan is only a permanent

employment for non-temporary male workers not near retirement age,

during recessions when companies are forced to cut costs mostly

female, temporary, and elderly workers wind up loosing their jobs.