By Hiroshi Ono. Japan Labor Issues, vol.2, no.5, February-March 2018 [[Ono2018.pdf]] ---- # I. Introduction - “Regular employees in Japan still work more than 2,000 hours per year, a level more or less unchanged since the 1990s (Ministry of Health, Labour and Welfare 2015)” (Ono, 2018, p. 35) - “the expression “karōshi” (death caused by overwork)” (Ono, 2018, p. 35) - Japanese law and policy have been amended, but no impact. ## Sociological perspective - Economics alone doesn't explain why work hours are long. - “it would be overly simplistic and unconvincing to suggest that working hours in Japan could be reduced if (for example) the marginal tax rate were raised to European levels, without taking account of the cultural and contextual characteristics of the countries in question.” (Ono, 2018, p. 36) - In this paper, I argue that the essence of the long workday problem resides in a complex location, embedded in social norms and employment practices that elude measurement. Effectively tackling the problem requires both an economic approach accounting for the underlying incentive structures, and a sociological approach understanding the social-institutional context of the Japanese workplace. # II. Why long workdays are a problem 1. Long workdays produce waste and inefficient allocation of human capital. 1. Despite long work hours, Japan is less productive than OECD average. 1. “Both at the firm and macroeconomic levels, Japan is less productive than the OECD average. Return on equity (ROE), one indicator of corporate performance and profitability, is far lower than their counterparts’ in Europe and in the U.S.1 meaning that they are using capital less efficiently than their Western counterparts do.” (Ono, 2018, p. 36) 2. ![[Screenshot 2023-07-10 at 2.15.34 PM.png]] 2. Long workdays make it harder for people to balance work with private life. 1. “The problem of long working hours is closely linked to that of declining fertility (Ikeda 2010).” (Ono, 2018, p. 36) 3. Long working hours impedes the advancement of diversity 1. man-centered corporate culture, women can't participate in the labor market. (fewer women) 2. Fewer foreign talent because they will not want that long work hours. 1. “In a man-centered corporate culture, long workdays became the norm and an indicator of loyalty and commitment to the company” (Ono, 2018, p. 37) 2. “Work practices premised on long workdays and overtime are increasingly problematic because they inhibit women’s participation in the labor market.” (Ono, 2018, p. 37) 3. “long workdays also marginalize foreign workers in the labor force” (Ono, 2018, p. 37) 4. “superior talent will forgo employment in Japan if there is a significant disparity between the Japanese conventions and global norms” (Ono, 2018, p. 37) 4. Long workdays can stifle innovation. 1. Too busy, no time for ideation, to be creative. 1. “Research in psychology has shown that abundant ideas and creativity arise when there is a surfeit of time (Carson, Peterson and Higgins 2003)” (Ono, 2018, p. 37) 5. Long working hours have a negative impact on health and wellbeing 1. May earn more money, but no time to enjoy it 1. “There is also evidence of a negative correlation between long working hours and subjective wellbeing. In their study of happiness among German workers, for example, Pouwels, Siegers and Vlasblom (2008) found that (1) more working hours leads to higher income, and (2) higher income increases happiness, but that because (3) longer working hours have the effect of reducing happiness, ultimately (2) is offset by (3).” (Ono, 2018, p. 38) # III. What causes long workdays? - There are clusters of multiple factors. - “a cluster (or bundling) of complementary institutions whereby its essential parts, such as lifetime employment, seniority wages, job rotation and internal promotion, are bundled together.” (Ono, 2018, p. 38) ## 1. Japan’s input-oriented society - “Long workdays are a symbol of an input-oriented society.” (Ono, 2018, p. 39) - Seniority-based pay reward loyalty and commitment over quality - “Under seniority-based pay, one of the pillars of the Japanese employment system, wages rise automatically in accordance with years of service. Rather than output and performance, this system rewards input in the form of commitment and loyalty to the company.” (Ono, 2018, p. 39) - They use work hours and years of service to explain increase or decrease of salary. While foreign companies use measure such as ability, performance and outcomes. - “In research by Ono (2007) using the dataset Working Persons 2000 (Recruit Works Institute), regular employees in Japanese companies most frequently cited working hours and years of service when answering the question “What are the main factors that increase or decrease your pay (monthly salary)?”” (Ono, 2018, p. 39), - “By contrast, the most common responses by regular employees working for foreign companies (in Japan) were individual ability, performance, and outcomes. Clearly, the former responses are input-oriented, while the latter are focused on output and productivity.” (Ono, 2018, p. 39) - It's often difficult to measure output, so easier to just measure input. (Reminded me of what can be measured may not be meaningful) - “Lazear (1986) further explains that (fixed) salaries are more often observed when output is difficult to measure, and results-based pay when the output is easy to measure. So, pay levels based on input for white-collar professionals whose output isn’t easily measured, as in Japan’s “salari-man” (salaried worker), is consistent with Lazear’s theory.” (Ono, 2018, p. 39) - Recent shift from "seniority-based" to "merit-based" pay system. But hard to quanitify - “The biggest factor slowing full introduction of merit-based systems in Japan is the problem that “their evaluation standards lack objectivity and fairness.”4 Under a results-oriented system, outcomes have to be shown using quantified, objective indicators, rather than the vague input of “working hard.” Companies are still developing ways to establish better evaluation metrics for salaried workers.” (Ono, 2018, p. 39) ## 2. More signaling, less human capital - Instead of investing to upgrade skills that are translatable to other companies, workers acquire "firm-specific" skills which are less marketable. - “A characteristic of Japanese workers is their preponderance of firm-specific skills. Compared to general skills, firm-specific skills are less marketable and less portable.” (Ono, 2018, p. 39) - Leading to lower worker mobility, and less labour fluidity. They cannot compare their value with other workers because they are so embedded in their firms. - “A higher share of firm-specific human capital (relative to general human capital) leads to lower worker mobility and at the aggregate level, a labor market characterized by less fluidity. At the same time, because firm-specific skills are “embedded” in companies, their market value is unknown (in theory, the market value of firm-specific skills is zero).” (Ono, 2018, p. 39) - “Many Japanese workers simply “do not know how to change jobs” (Ono an” (Ono, 2018, p. 39) - And there is the Japanese culture of not standing out, extreme modesty that work against them - “Even if individual workers had an accurate sense of their own market value, Japan’s labor market would not necessarily operate according to economic theory. To inform others of our own market value, we need to sell (or market) ourselves directly and provide information appealing to employers. But the Japanese have an aversion to direct communication and self-promotion, and tend to be unduly modest when describing their own merits and strengths. Instead, they adopt a passive attitude and tacitly assume that others will know their merits. In other words, the labor market posited by human capital theory, in which workers compete against each other for better working conditions based on their market worth, may be a setting that is too direct for the typical Japanese worker.” (Ono, 2018, p. 40) - Education credentials are a signal/proxy that they are more productive (-- is it really the case?) - “A classic example is the use of educational credentials in the job market. A stronger educational credential acts as a stronger signal for higher productivity than does a weaker credential, and therefore weighs heavily for Japanese companies when hiring. This less direct channel for conveying one’s merits may be better suited to the Japanese character.” (Ono, 2018, p. 40) - Since the evaluation system measures input, showing effort is valued. Work hard". - Since they also value "teamwork", it's even harder to measure individual contribution - “If an evaluation system is based on input, there is an incentive to increase input. In workplace environments where signaling is important, workers try to strengthen signals that show how much effort they are making, rather than increasing their own productivity” (Ono, 2018, p. 40) - “In particular, “ganbaru” or “working hard” has been called a behavioral trait symbolic of the Japanese (Amanuma 1987). Steger (2003) explains that the Japanese have an abnormal obsession with “ganbaru,” and that rather than achieving results through effort, the act of exerting effort in itself is highly prized. This reinforces the tendency to judge a poor outcome as arising not from a lack of ability but from a lack of effort, meaning that workers immerse themselves exclusively in their work (or are expected to do so) until they achieve the desired results. The appearance of sacrificing leisure time to devote themselves to their work without giving up is taken to symbolize “self-sacrifice,” and is understood as a signal indicating loyalty to the company and motivation to work (Nemoto 2013; Tsuru 2010).” (Ono, 2018, p. 40) - Moreover, a corporate culture that emphasizes teamwork, as Japan does, also makes it difficult to measure individual contributions with precision, and increases the dependence on signals. Signaling - telling people that they are hard working - Seeing a salaryman (Diet member) dozing off is a signal that he is hardworking. - “Steger (2003) on “dozing” (inemuri). The sight of the Diet members openly dozing off during live TV broadcasts is a phenomenon unique to Japan. Why is dozing so tolerated in Japan, not only in the Diet but also in public transportation, classrooms, and meetings? Steger explains that in a country that values “ganbaru” and “working hard,” dozing is regarded as proof that a person is tired from working too hard. In other words, dozing is a signal of loyalty and diligence, and is regarded as an act that is not necessarily detrimental. Dozing is a by-product of the input-orientation that values effort; this must result from a unique behavioral trait of the Japanese, i.e. a combination of “ganbaru = working hard” with “amae = presuming the indulgence and dependence of others.”” (Ono, 2018, p. 41) ## 3. Group awareness and hierarchical relationships - Afraid to go home on time, before the boss, or making other feel bad. - “In Japan, many employees worry about the atmosphere in the workplace even after finishing their work, or are reluctant to go home because their boss is still in the office.” (Ono, 2018, p. 41) - “The custom of “tsukiai zangyo” (collective overtime), whereby going home on time makes people feel badly vis-à-vis their coworkers could be a uniquely Japanese phenomenon.” (Ono, 2018, p. 41) - -- i think in other labor markets that focus on result-based evaluation, working overtime signals that you are not efficient (my own view) - “In European and American labor markets, where the introduction of results-based evaluation has a longer history, the perception of overtime as a virtue is much weaker; instead, there are strong incentives to finish work quickly and go home early” (Ono, 2018, p. 41) - Japanese workers work fewer hours after they visited Europe. Because of peer pressure. - “Yamamoto and Kuroda (2014), in fact, Japanese employees returning from business assignment in Europe work significantly fewer hours than before their assignment overseas, even when changes in the volume of work and economic environment are controlled for.” (Ono, 2018, p. 41) - “peer (or neighborhood) effect, whereby individuals adjust their behavior in response to their surroundings. In other words, Yamamoto and Kuroda established empirically the level to which Japanese workers are sensitive to the immediate work environment.” (Ono, 2018, p. 41) ## 4. Internal labor market - Employees assume to work long term in a company. They are rotated in various division upwards. They are generalists, need to be flexible to meet organisational needs. So there are no specialisation or division of labour. - “Employees rise through their organization internally in an upward spiral through job rotations in various divisions of the organization.” (Ono, 2018, p. 42) “job descriptions are not clearly defined, they respond flexibly to these varied job assignments within the company.” (Ono, 2018, p. 42) “lack of clear boundaries between job descriptions also means that there is little specialization and division of labor within these companies” (Ono, 2018, p. 42) “internal labor market setup creates generalists who can handle a wide range of jobs.” (Ono, 2018, p. 42) “because staffing needs are met internally as the need arises within the organization, the range of employees’ responsibilities can expand without boundaries.” (Ono, 2018, p. 42) ## 5. Ambiguous job descriptions - Ambiguous, implicit contract. Employees are expected to do whatever they are asked to do. - “The implicit nature of Japanese employment relationships is very different from the explicit nature of Westernstyle employment relationships.” (Ono, 2018, p. 42) “In an implicit contract, the job description and range of responsibilities are not clearly defined, and any directive from the company must be followed even if the tasks involved are not directly related to one’s job.” (Ono, 2018, p. 42) “This practice is regarded as normal in Japan, but from the perspective of other cultures, it isn’t” (Ono, 2018, p. 42) - “But in employment relationships governed by implicit contracts as in Japan, with its rigid hierarchical relationships and strong group consciousness, the dominant culture makes it hard for anyone to refuse when asked to perform a task, however irrelevant to one’s core function.” (Ono, 2018, p. 42) ## 6. Gender division of labor - This whole section elaborated about gender role.. a whole new topic of itself - “In Japanese society, where the image of immersing oneself in one’s work defines masculinity, and “working hard” and “not giving up” are regarded as virtues, men working long hours are acting consistently with expectations. Conversely, men finishing their work promptly and going home “earlier” is not consistent with the conventionally favorable image, and could make a negative impression on others. One hears anecdotes of men who could leave work on time, but say they “don’t want to go home.”5 Women, however, who put in long workdays are regarded as “working just as hard as men,” and this perspective shows that such behavior is not consistent with women’s traditional gender roles.” (Ono, 2018, p. 43)