Japan labor shortage prompts shift to hiring permanent workers
bloomberg.com
bloomberg.com
It does not astound me that companies are having difficulty hiring white collar workers for $2k a month with the expectation of traditional Japanese working conditions but with traditional American expectations about job security.
At the same time I am not going to dispute your opening line: because there sure as hell is a disagreement on labour cost too.
Which brings up another fascinating point: the situation is Japan is going to be a data feast for economists. A modern, technologically advanced country going through such a shortage of labour that it's affecting the equilibrium and general conditions of the labour market.
0: https://en.wikipedia.org/wiki/Full_Employment_in_a_Free_Soci...
If 2.8% of the iron we dig out of the ground remains unused, is there a shortage of iron? In my world this would indicate abundance.
I think at this point we can just move on. I will state it explicitly: the notion of "expected unemployment rate at full employment" is meaningless. Whatever the supposed number is, it tells us nothing and deserves no discussion.
I've had a question about Japan for a long time I hope someone reading may have some insight:
The nature of the Japanese workplace and society is so unique on the planet, does anyone know if there has ever been an in-depth economic study trying to translate some of it into numbers?
For example, on one hand you have the negative economic effect of "overstaffing" (my word), or having employees doing really quite unnecessary (ignoring a variable increase in pleasantness) things. Or, staying until 10PM pretending to work. Both of these must hurt productivity numbers big time.
But on the other hand, Japan enjoys a relative lack of expenses for many societal ills like various crimes, welfare, drug abuse, etc which would to a degree cancel out the above expenses.
It's obviously very complex, but I wonder if anyone has ever made a competent attempt at putting some of this into numbers?
The practical month to month housing costs are included. Rent is an item in the basket of goods, as are mortgage payments, insurance payments, etc.[1]
> as if that's a minor part of a typical family's budget
What is missing is the "once in a lifetime" down payment made on the purchase of a home. But that happens so infrequently that it is difficult to see how spending changes over time. In terms of family budgeting it doesn't seem completely unreasonable to exclude it - you don't really need to budget for it.
[1] http://www.statcan.gc.ca/pub/62-001-x/2017003/tbl/tbl-4-2-en...
The reality though is different:
http://www.theglobeandmail.com/report-on-business/economy/ec...
Think about it: how can you have ~1% GDP growth, flat or diminishing wages, but housing prices (the largest purchase any family will ever make, 10+ years of salary) rising at 5% to 30% (in extreme cases) per year, year after year after year, with no drop in other spending categories, but somehow inflation is <2%? Where is the money coming from to drive this housing bubble?
So what we have here is our government deliberately misleading us on incredibly important economic matters, that are massively distorting our economy and the economic behavior of individuals.
A bubble constrained to a handful of specific markets within the country. Which, a common theme I hear is that people choose to live in those markets because their income is higher than if they lived elsewhere. It seems that the market is simply correcting on the expense side so that incomes between those locations and other parts of the country even out. If it were more lucrative to live elsewhere, people would.
To put it another way, if, hypothetically, your expected revenue is $50,000/year in Toronto and $35,000/year in rural Manitoba, and your expenses are $20,000/year in each location, you have $15,000/year additional money that you can put into the Toronto housing market. On the other hand, if expenses rose to $45,000 in Toronto, then your income would actually be $10,000/year higher in rural Manitoba. You'd be hard-pressed to not consider moving for a $10,000/year raise.
But the population of Toronto, and similar markets, keep on growing by leaps and bounds, which indicates that there is still extra money to be made there. Money that can eventually be spent on housing.
These price increases have been excluded from inflation (price inflation) numbers, as has the massive growth in consumer credit (monetary inflation). I don't have an article for you, but Canada has surpassed the US at the peak of their housing bubble in most any metric you look at, some of them substantially. Unsurprisingly, convincing anyone to acknowledge this reality is near impossible, the numbers can stare people in the face and they simple refuse to believe them.
The biggest trouble with Canadian data is that, unlike most of the rest of the world, they calculate it using the mean. A figure that is easily skewed by the sale of multi-million dollar mansions, which means little to the typical family budgeting for a home. It is true that the average home nationwide has risen substantially, but mainly because of Toronto and Vancouver specifically. Median home prices would be much more useful here, but data is nonexistent (as far as I can tell).
As for the growth, inflation over the period is 16%, so you would expect that much for sure. Historically, houses have followed inflation. Conveniently, I purchased my Canadian (non-Maritime, non-Toronto/Vancouver) home 10 years ago, and that sounds just about right for what I could expect to get out of it a decade on. Maybe slightly more, but the local economy has also improved dramatically in that timeframe, so I expect the locals have seen real increases in their income as well. The best data I can find for the localized area seems to confirm that.
> far beyond income growth.
The government redesigned their website and I have never been able to find it again, but they used to have a really good chart showing incomes over time. For most, their incomes have been been stagnant in real (adjusted for inflation) dollars. That is true. However, the income of the top 20% has skyrocket in the last 10-15 years. The most liberal figure I have ever seen for sales volume in the GTA is 80,000 units per year. A region with 2.6 million households. That is just 3%. It may be a bit of a misnomer to think that average people are buying places at all. If only 3% per year in the GTA are buying homes, that can easily be satisfied by the top 20% who are making huge income gains, especially when you consider that they can buy more than one home.
Are you saying that your house in non-maritimes Canada has only appreciated 16% in the last decade? Are you able to disclose where this is, because I might move there.
Some more statistics on the insanity:
http://business.financialpost.com/news/economy/life-after-oi...
It's so strange to me to see articles like the above, charts like this: http://www.macleans.ca/economy/economicanalysis/canadas-hous..., read newspaper articles from around the world discussing our bubble, but then encounter people like yourself who witness literally nothing historically unusual, at all. It is truly bizarre.
Perhaps I'm misunderstanding your question, though.
My objection is to the use of the unemployment rate (as defined by most governments), not to the study of the actual economic phenomenon of unemployment. We should insist on using better or less massaged indicators (perhaps the labor participation rate, though I do not want to get into a discussion of which specific indicator to use as a replacement), instead of going along with the use of deceptive statistics.
If you think that is throwing the baby out with the bathwater, I retort that throwing out a field's metaphorical babies can be an appropriate punishment for deceiving the public. Surely economists, of all people, can appreciate the importance of putting the correct incentives in place.
Economists in general are very doom-and-gloom and say that Japan needs mass immigration to balance the population decline, but that would clearly be a mistake. Here's an interesting video on the subject that mostly echoes my views: https://www.youtube.com/watch?v=Z3BYCK-3jPc
Infact one of the old chef's just stopped turning up and said I needed a break, they had to pay him 3 months salary still.
Edit for more info:
That is why there has been a huge reduction in the past 10 years (this is anecdotal evidence I have heard by word of mouth), of hiring staff as seishein.
One school I worked at refused to put staff on as seishein, then myself and a few others left due to this, and they changed their practices.
I don't know how it is in Japan. But in Spain, there is a fund, paid by all companies, that is used in this situation. It works like a mandatory insurance. If your company goes under, your employees get the money from the fund. The fund name is FOGASA (FOndo de GArantia SAlarial), it means salary guarantee fund.
As such, I hope that this is the beginning of a long upward trend in increasing the proportion of permanent workers. It will likely be very good for Japan in the long run if it can be sustained.
I will be interested to see what happens during the big worldwide economic downturn.
Media BS aside, the labor shortage has certainly not brought any improved worker treatment.
(Incidentally, there is a union here, but they are not very effective at anything, as is the norm for Japanese unions)
This kabuki theater by business political advocacy groups is a perverse form of the old Soviet joke "they pretend to pay us; we pretend to work", except the pretend on the part of labor hasn't taken hold yet at large scales. Perhaps a perverse form of a Potemkin village is a more fitting picture.
After a lifetime of "overwork", retired japanese people opt to do part time work to stave off boredom. I think they just think of it differently.
There exist government employees whose literal only job is preventing deaths from exhaustion. Japan has at least a few hundred of these a year; the true number of excess overwork-caused death is probably low tens of thousands when you factor in suicides.
It's often because the ad is "fake" in the sense that is is a mandatory first step before applying for a temporary foreign worker because they "couldn't find" a Canadian to fill the job. I know someone who worked at a foreign recruitment company so I know all about the outright fraud that goes on.
I also know someone that works at a company that sells relatively large $ commodities into China, so I get to see all the fraud of how Chinese do business (big deals being chopped up into smaller pieces and deposited into "nieces and nephews" accounts, etc).
I refuse to believe the Canadian government isn't well aware this is all going on (for example, it accidentally leaked that they don't audit suspicious real estate deals if a non-Canadian is involved as it might be perceived as racist), which is pretty damn depressing considering more and more people including high paid professionals are struggling financially.
* temp: working 15 hours a day in three jobs.
Sharp contrast to the eternal optimist, borrower spender American stereotype.
Only for people who refuse to appreciate that immigration as a whole is America's cultural bedrock, and not merely the effect of immigration from a particular group or region.
I should also clarify, I don't know what percentage of those people were capable of speaking English, based on past experience of attempts I would guess < 25%, but that's pure speculation.
My impression of the US mindset about the future is that it's hazy but also positive. This leads to low or negative savings and few convictions about where to invest. Most just take a broad portfolio approach and buy index funds. Many people have both debt and holdings in index funds. They're not sure how, but feel optimistic that things will work out well somehow.
Along with a huge and growing underclass of freeters and other workers who cannot land the shrinking number of corporate positions, housing costs are why Japan is famous for "parasite singles". Nonetheless, even those living below the poverty level are less likely to carry personal debt than Americans.
Another problem with attributing American saving habits to health care or schooling costs is that Americans had a high propensity for debt even 30 years ago when those costs were much lower. Cultural differences are a driving factor.
My viewpoint is far more pessimistic: I think there's a major cultural difference between the US and Japan, and that Japanese tend to be better managers of their personal finances than Americans. Americans have much higher debt, but it's because too many of them have spending addictions, and think they deserve to live like royalty, and with the availability of easy credit get sucked into that trap. I've seen it myself far too many times. Also, perhaps education has something to do with it: Americans generally aren't taught to budget or manage their personal finances in school much from what I've seen. Maybe they are in Japan.
People in America complain a lot about things like the cost of rent, etc., which is definitely true IMO, but they do also tend to splurge on a lot of stuff they don't need, such as Starbucks drinks. If Americans were really short of funds, then how do all these Starbucks on every street corner stay in business selling $5-10 fancy drinks?
Japan's debt-to-GDP figure far exceeds the US's and yet it's industries are getting punched left and right (by China-Korea and the US). Becoming more realist/risk-averse after the Bubble era is not a great feat IMO.
That's the Japanese government, which is different from the Japanese people, who have among the largest savings per heard on the planet. Do not equal the people to the state, please.
Agree, while there is a growing number of Japanese who resort to カードローン (quick credit) these days, for instant gratification despite having few savings.