The Particular Features Of The Employment System In Japan

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