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Masahiro Abe

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What is the Future of Japanese Work Styles?

Masahiro Abe
Professor, Faculty of Economics, Chuo University
Area of Specialization: Labor economics

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Japanese Work Styles Are Diversifying

At present in Japan, we can choose from a variety of work styles. We can work as regular employees or staff, or as part-time workers, Arbeit (temporary) workers, contract employees, entrusted employees, dispatched workers from temporary labor agencies, or other types of “non-regular employees.”

According to the Labour Force Survey (Detailed Tabulation) (July to September 2013 quarterly average results) put out by the Statistics Bureau of the Ministry of Internal Affairs and Communications, there are 52,050,000 people employed by companies and other organizations in Japan. Of these, 32,950,000 are regular employees, and the remaining 19,080,000 are non-regular employees. This means that more than one in three employed people are non-regular employees. Moreover, the number of regular employees has decreased by about 320,000 while the number of non-regular employees has increased by about 790,000 compared to last year’s July to September quarterly average results. In the early 1980s, only about one in seven employees was a non-regular employee, indicating that non-regular employee work styles have become more widespread over the last thirty years.

According to the breakdown of non-regular employees, 13,270,000 are part-time or Arbeit workers, 1,100,000 are dispatched workers, 3,930,000 are contract or entrusted employees, and 780,000 are listed as “other.” Thus, 70 percent of non-regular employees are part-time or Arbeit workers. Dispatched workers, regarded as being synonymous with non-regular employees, constitute only 6 percent of the total. Furthermore, 30 percent of non-regular employees (6,110,000) are male, and the remaining 70 percent (12,970,000) are female.

Reasons for Diversification I: Reasons from the Perspective of Employees

So why are regular employees decreasing and non-regular employees increasing? The answer can be thought of as having two main components: reasons from the perspective of employees and reasons from the perspective of employers.

Let us first consider the reasons from the perspective of employees. These can be further broken down into positive and negative reasons.

Positive reasons include choosing to work as a non-regular employee for flexibility in the number of hours and days worked. For example, there are people like housewives and students who would like to work part-time in a way that doesn’t conflict with their housework and childcare duties or studies, respectively, and can only work two or three hours a day, or two or three days a week. These people cannot work the same way that regular employees do, so they choose non-regular employment.

On the other hand, there are also negative reasons. These include wanting to work as a regular employee but being unable to find the job one wants and having to work as a non-regular employee. In Japan, the economic slump following the late 1990s is frequently referred to as the Lost Decade. Japan entered an employment ice age, when the job market became inhospitable even for new graduates. Many graduates of this era were unable to find the jobs they were looking for and became non-regular employees out of necessity. While some of them have gone on to find work as regular employees—sometimes at the same workplace—many are still working as non-regular employees, decades later.

According to the Ministry of Health, Labour and Welfare’s 2010 General Survey on Diversified Types of Employment, about 40 percent of non-regular employees have chosen non-regular employment for positive reasons, and about 20 percent have chosen it for negative reasons.

Reasons for Diversification II: Reasons from the Perspective of Employers

Meanwhile, there are reasons for the employment of non-regular employees from the perspective of employers.

First is the influence of industrial advances. The retailing, restaurant and the service industries have always used non-regular employees. In these industries, there are large fluctuations in business, accompanied by changes in labor demand. When the manpower of regular employees alone is insufficient, non-regular employees are hired. Due to industrial advances, there has been a rise in the percentage of people hired by tertiary industries and an increase in non-regular employees.

Another reason companies have been employing more non-regular employees is that they can be employed at comparatively lower wages than regular employees. The economy is becoming increasingly globalized, as is the labor market—especially at manufacturing sites. Japanese production bases cannot maintain a competitive edge when domestic wages are high in comparison to the low wages of Chinese and Southeast Asian workers. Large numbers of non-regular employees are employed to ensure a sustainable competitive edge.

Finally, technological innovation has also had an impact. Rapid technological innovation, especially in the area of information technology, is giving rise to jobs that do not require expertise. In the past, human resources needed to be developed and acquire expertise within an organization to perform the required work. As the work that can be performed by untrained people increases, the need for development of human resources will decrease. Companies are no longer inconvenienced if they hire non-regular employees instead of regular employees.

Work Styles of the Future

The labor force in Japan is shrinking as the birth rate continues to fall and the population ages. Women and seniors are expected to have more employment opportunities than ever before, but they will find it difficult to strike a balance between work, on the one hand, and family life and health, on the other, if they adopt the same work style as today’s regular employees. Thus, the diversity of work styles will continue to increase. Moreover, as technological innovation continues, work traditionally done by hand is expected to be increasingly taken over by machines. As the need for advanced skills required to do the work machines cannot do increases, there will be a rise in work in which employees assist machines. It seems that both employees and employers will encounter increasingly diverse work styles.

Masahiro Abe
Professor, Faculty of Economics, Chuo University
Area of Specialization: Labor economics
Professor Abe was born in Iwaki, Fukushima Prefecture in 1966. He completed the coursework for the doctoral program at the Graduate School of Business and Commerce, Keio University and withdrew before obtaining his doctorate in 1995. He obtained a Ph.D. in Business and Commerce from Keio University in 2003. After working at the Central Research Institute of the Electric Power Industry (a nonprofit foundation), the Institute of Economic Research, Hitotsubashi University, and the Department of Economics, Dokkyo University, he assumed his current position in 2013. He specializes in labor economics, econometrics, and economic policy. He concurrently serves on committees such as the Ministry of Health, Labour and Welfare’s Labour Policy Council, Council of Advisers on Policy Evaluation, and Study Group on Employment Policy, and the Cabinet Office’s Committee for the Promotion and Evaluation of Work-Life Balance. His major publications include Environmental Changes in the Japanese Economy and the Labor Market [Nihon Keizai no Kankyou Henka to Roudou Shijou] (Toyo Keizai), winner of the 49th (2006) Nikkei Cultural Award for Books on Economics and the 29th (2006) Excellence Award for Books on Labor.