Japan’s labor market is tight, and higher wages may be needed to retain workers
bloomberg.com
bloomberg.com
The non-pecuniary terms have been weakening in recent years but salaries have not been increasing at anything approaching parity. The non-pecuniary terms are not small relative to the total notional compensation package.
One reason that Japanese companies are having difficulty hiring folks is that their candidates have marked-to-market the non-pecuniary terms. There is a totally defensible reason to value Toyota's standard offer as of 1975 at being worth an integer multiple of the salary part of the package. It is very, very difficult to make the case that a traditionally managed Japanese company's non-pecuniary terms are presently worth $50~$100k per year given that one will be taking advantage of them in 2017 to 2062 as opposed to 1975 to 2020.
[+] One of my first conversations with a boss at a traditionally managed Japanese company involved my expected timeline to get married and what the company's role in that process would be; my boss assumed that it would be sourcing the bride.
Yikes.
The reality is closer to match making: some colleagues might introduce you to somebody who could be a match. Or maybe they will invite you to what is called a goukon, a group date where one of the male participants invite a few colleagues or friends of his who are single while his girlfriend invite the same number of female colleagues or friends of hers who are single.
I've never been a full time worker in Japan, except in my own consulting company (obviously -- otherwise I would still be there ;-) ). But with a 1 year renewable contract (the normal way to work if you are not a full time employee), I was surprised at the extent to which the company takes care of you. It's nice if you are like me where you want to concentrate on work, but I've known people who get frustrated by what they see as an intrusion on their personal affairs.
When I was working at the high school where I taught English, several times I had conversations with the vice principal who felt that me being single past the age of 40 was a problem. He even sent me to talk to the nurse so that she could explain how Japanese relationships work and impress upon me the importance of taking things seriously.
And... well... I listened. And they were right. I got married to a Japanese woman who I was dating (not the nurse ;-) ). Not only has it made my life dramatically happier, but it's helped my job incredibly (even though I'm consulting IT related stuff instead of teaching English ;-) ). But it's kind of beyond weird have that kind of intervention at work...
Studies have shown having a partner increases wages and helps you live longer. And the Japanese live the longest. Strange coincidence.
If you can find the rate of people living with an unmarried partner in the US or in Japan, I'll be surprised because I certainly can't. Part of the reason is that until recently it wasn't even on the census -- only "cohabitating families", which includes living with your parents.
I know this kind of stuff get repeated in the news over and over again, but I'm going to be honest with you. A lot of it is bad journalism. It is popular to trash foreign cultures and hold up your own as superior -- it sells. Reporters get these fluff pieces from news wires (or actually the vast majority of "trash japan" stories start from a single place - The Japan Times) and don't check the facts.
Having said that, if you actually can find the facts, I would be interested in seeing them. I suspect that you are right that people living with unmarried partners (the term currently used by the US census) has a higher incidence in the US than in Japan. But you will have to do a fair amount of work to make the comparison meaningful.
The average age of marriage in Japan is 30.1. The average age of marriage in the US is 28.2. If you couple that fact that 66% of people who got married in the US in 2012 cohabitated for more than 2 years, then you can see that there are a fair number of young people in the US who are essentially married, where in Japan people wait until they are older.
In Japan, that kind of cohabitation is rare (people live with their parents before they get married). One of the reasons (and IMHO, the overriding reason) that Japanese people get married late is because young Japanese women hold a lot of power in the proceedings. Young women live with their parents and work. And even though they often help with costs in the household, they are relatively financially well off. Also, young women tend to want to have children when they are older because it will interfere with their job. Single income families with stay at home mothers is still very popular here. This pushes the age of marriage back. It also pushes the fertility rate down (because if you have your first child in your early thirties, then there often isn't enough time to have many more. Also, it increases the generational gap).
Now, another complicating factor is that in Japan "marriage" is not really a thing the way it is in the west. In the west, marriage is still, by and large, a religious institution. In some countries, only the church can marry you. In Japan, the only thing that counts is having your name on the family register. You don't even need a ceremony. You can just wander up to city hall, fill out the forms and, voila, you are married.
If you are not on the same family register in Japan, you are not in the same family. It does not matter where you live. When the census comes around, it is sent to the head of the family on the register. If there are 2 families living at the same address, then there are 2 census forms. There is no way to indicate that you are cohabitating! Similarly, if you are on somebody's family register (because you got married), but you aren't living together -- there is no way to get another census form! So separation statistics in Japan are also impossible. I even know people who have had a wedding ceremony, but for various reasons did not want to change the family registry. So they are not married! (Which makes things very complicated because all family law is based on the family registry -- if you are not on the registry, then you are not a family, by definition).
Basically, what I'm saying is that you're going to have your hands full if you want to make a meaningful comparison. And like I said, I realise that people are inundated with a lot of stuff from the media (and especially youtube), so it is hard to know what is right and what is wrong. Just keep in mind that quite a lot of the stuff you here is motivated by something other than trying to educate you.
My experience with a traditionally Japanese run megacorp/zaibatsu in the heart of Tokyo is much more like a traditional western company. The minutia of HR is very Japanese and hard to get your head around, but the broad strokes of salary/bonus/non monetary benefits (I had to look up what pecuniary means) is basically the same.
Are you sure you understood him correctly? That would be highly irregular, to say the least. More likely it was an offer to pay for a matching agency. Arranged marriages between specific people are pretty rare these days, and unheard of outside of family. Unless your boss literally adopted you, he would never take on that responsibility!
I can absolutely imagine a 50s-ish japanese boss saying exactly the contents of your quote.
Still. In my company, if a division is going to source a component for us, it means they deliver that component. They don't provide a bunch of google options for manufacturers we might want to look at, or make introductions, or whatever. They get the damn thing and make it available to us. As such, sourcing has a specific meaning to me and perhaps I went overboard applying it to the ultra-great-grandparent comment.
One can think of such things as non-pecuniary benefits of a job but I think you'd be hard pressed to find a boss who's ever considered it in those terms. More likely they're just acting on the "truth universally acknowledged" that young single employees must be in want of a spouse.
(Of course, the reverse of this is one of the ways Japanese companies are rough on women - if you're 23 and single people will tend to assume you're going to marry someone and quit in a few years, and treat you accordingly.)
Yes. This is by design. You're not just joining a company, you're getting social belonging and a built-in set of drinking buddies. That is such a critical part of the deal, and such a universally acknowledged part of the deal, that it is not routinely described as part of the deal.
(And having said that, if you're single you can of course expect the volleyball coach to paternally try and set you up with that nice 24 year-old on the team...)
Right, but I also envisioned that they'd be in the awkward position of "hm, but Japanese women won't want a gaijin, obviously ..." and then debating whether they need to call up the "mail order bride" services.
The paragraph starting with the sentence "Don’t have a wife?" and the next one after it mention that practice, it's too much to copy paste in here.
[1] as in - lengthy, detailed and well written, but I can't judge the content itself.
I had no idea and he didn't link to it and the explanation there is much longer and clearer than the one line remark about Japanese boss "sourcing the bride" in the comment was. People are taking the comment to mean some medieval style arranged forced marriage.
To be clear, this is not at all normal in Japan either (at least not in Tokyo or Osaka or anywhere other than very small companies with septuagenarian managers). No one prices matchmaking services into compensation considerations. Agree generally with the rest.
One example, during 2008 crisis, the company my friend was working for 20+ years already, was in trouble and didn't pay employees for almost a year. My friend continued to work for the company despite it being bankrupt and him not getting paid for so long.
Once company turnaround completed and came out of bankruptcy, owners not only made unpaid employees whole but has done much more for the employees that stuck around during bad times.
The loyalty runs both ways.
I've worked in Japan, and seen the inside of a few Japanese companies. I've seen some weird stuff. I've worked in other countries too and I saw some pretty weird stuff in those companies too.
Thing is, I think there's a tendency too attribute weird things that happen in Japan to "Japanese culture" where-as sometimes it's really just a weird thing that happened...
I think that's less of a case perhaps in other countries, where you have a better understanding of the baseline culture.
I'd love to see more studies/data on what the average experience is like.
Most people can't afford to be 'loyal'(especially for a year~) and have bills to pay/children to feed.
I've been to several factories/shops, and that 'loyalty' is quickly eroding. As worker wages stagnate while Management's increase. Management being under the squeeze of following Gov't Regulations and Outsourcing. So both sides are under this toxic stress.
This was the example I was thinking of when reading the first part of your message. I'm glad you said it because I feared it would've been seen as an exaggeration if I added it as an example I've heard of.
So to anyone who is reading about this and doesn't trust a single anonymous source, let this second anonymous source add on that I've read about the same behavior, and even more disturbing behavior happening to unmarried female employees (where do you think they source the brides from?).
That said, I've heard about these cases at a few companies. I do not have sufficient evidence to generalize beyond that, only to point out that it does happen (and is tolerated by the legal system, no chance of that in the US), not the rate at which it happens nor if it is a fair generalization of Japanese companies in general.
Marriage is pretty complicated here, at least to my outsider eye. I know quite a few middle aged women who openly have steady (usu. older) boyfriends, but these boyfriends go home to a wife who barely speaks to him anymore, and yet refuses to divorce him. This also seems to be a relatively normal relationship in middle and later years here.
Like all human stuff, it's complicated under the surface.
>convenient marriage to a busy man who can give her children, financial support, and otherwise leave her alone.
This is likely going further off topic at this point, but between these two comments, why would a guy even want to get married? Even when one factors in a boost in pay/social status, this looks like a bad deal (and that is taking a very pragmatic look at it, but we are talking about marriages of convenience).
ie, the idea that falling in love and choosing your partner are somehow related.
I've witnessed first hand the collective hysteria when an ice cream company raised their prices by 10 yen[0] and also had to put up with coworkers banging on in excitement whenever 7-11 has an Onigiri sale dropping from 110 to 100 yen. Not to mention the queues stretching around the block when Yoshinoya cuts a buck and a half off their beef bowls.
My anecdotal evidence, based on looking in shop windows, is there's plenty of part time (arubaito) jobs on offer; the problem is young people are too smart to take them up on their pitiful 700 yen per hour offers, which in Tokyo barely cover your transport and lunch costs. And yet the businesses will continue to weep and wail and gnash their teeth because they can't find anyone. It's not rocket science.
[0] https://qz.com/656080/a-japanese-ice-cream-maker-deeply-apol...
Usually it's an up to 150 yen onigiri for 100 yen, so of course they're going to get excited.
Edit: It looks like it is/was an up to 160 yen onigiri for 100 yen! That's a 37.5% discount! [1]
My personal favorite along these lines is the way that a single building might have 2-3 floors of the same kind of restaurant (say, yakitori), but the one place that is 5 yen cheaper per item will have a line out the door, while the others are half-empty.
There's a large population of chinese students in Japan who are very happy to work at such rates.
> which in Tokyo barely cover your transport and lunch costs
Is this another of those things where paying a person an non-livable wage is going to be construed as a Good Thing™? How about we raise the prices so the people serving us the food can, you know, live?
If the 5 who would be unemployed have some superior alternative, why aren't they doing it already? Or would you say they should be forcibly unemployed to combat their laziness in looking for better work (which you apparently think exists)?
Or, far more likely, the CEO needs to make a few million less so the people who operate his business can EAT.
Whose life is better if the business doesn't exist?
And from this we then go the side hustles and the app workers and all the rest of the stuff that let us pretend someone working 120 hours a week for pennies is "doing good."
If this were true, why would people in bad jobs continue to show up for work?
Okay, you've identified that shifting people from precarious existence to outright starvation and homelessness will make others more aware of their plight. How will that help, exactly? Are they going to somehow turn around public opinion on the welfare state? Start a Communist Revolution? Because it seems like they will just be worse off, and we will be more aware, and nothing else will happen.
My understanding is that the blame for this lies squarely with the Bank of Japan. The system was much more stable under the Finance Ministry.
They need very substantial, sustained economic growth for a decade or more to start regaining lost ground. Their debt problems will continue to put pressure on the Yen, the debasement of which is a big culprit in the sizable drop in their standard of living over the last decade. While their interest costs are eating up such a large portion of their budget, their ability to properly invest into growth is heavily restricted. They're stuck between a rock and a hard place. I've yet to see a plan for how they're going to deal with that. To make matters worse, their savings rate has dropped to low single digits, as their standard of living has dropped they've been forced to reduce savings to try to maintain (which has further pressured the government's ability to properly fund itself, as they can no longer count on tapping into large new pools of savings via debt issuance, leading to abusing the Yen as a last resort).
salary - taxes - costs of living [including health insurance] + expected future revenues [in particular pensions]
Can you provide me evidence that, say, Germany, is so much worse than the USA with respect to this metric?
Cost of living is fungible. If I buy a property in an expensive city, then I have to invest a lot of my money, but I can also recoup that later if I sell the property. In boom cities the property will appreciate and create more wealth. Other costs like food and transportation provide the opportunity to be significantly frugal if you desire to be. But with the high compensation available to top workers in tech, it's possible to not be frugal and still save a large amount.
Having done this out of school, I found myself literally borrowing money for first/last/security. Not much money, and not for long, but that's of course because I had a signed contract before I settled on an apartment. Cheap living is pleasant, but it can leave you in a serious cash crunch should you try to move - especially as a young person.
I get contacted by recruiters from Germany (and other EU countries) quite often and they could never match London contractor pay even remotely.
Germany also has higher taxes and health care coverage is comparable in UK and Germany (both have national healthcare).
I think that's a microcosm of US vs EU salary situation in software engineering. IT job market in London is very different from any place in Europe, I'm not sure why that is.
The living costs in London are enormous. A fellow student has a highly payed analyst job at Goldman Sachs in London, but still does room sharing in a flat somewhere in London.
The point I was making even in top cities in Germany (Munich for example) where living costs are also enormous, salaries are not very competitive compared to SF/NY or London (this only applies to contracting, permanent salaries are low in London).
In London contractor market is very active and large so you can go from contract to contract basically without gaps and function basically as if you had a perm job but with much higher salary.
In Germany contracts are more sparse and I don't think it's easy to pull off a full time contracting there. The rates are also quite a bit lower (at least from emails I get from time to time about contracts in Netherlands & Germany) so there's that as well.
And of course, Tokyo is much much worse in this respect. I know some people who live in Tokyo so I know that being a programmer there is pretty bad.
A rule of thumb in Germany: If you earn double the amount as a contractor as you would as an employee this is about the same standard of living. In other words: If you don't really earn a lot more as a contractor than as an employee, it is not worth the hazzle.
Another problem for contracting are the laws concerning Scheinselbständigkeit (fictitious self-employment) - cf. https://de.wikipedia.org/wiki/Scheinselbst%C3%A4ndigkeit - which make it really difficult for companies to contract someone for a longer time.
First problem with that was that public sector IT in the UK depends on contractors so they have shot themselves in the foot (already many public agencies started relaxing the rules and working around IR35 to be able to hire anybody).
Also most contractors usually change contract every 6-12 months so it's not a problem. You don't work at a single company for longer than that (1 year 11 months is maximum, after that you get in trouble because of IR35).
> A rule of thumb in Germany: If you earn double the amount as a contractor as you would as an employee this is about the same standard of living
Well what if it is 3 or 4 or even 5 times more. With top market contracts the rates can be really good. If a company urgently needs to hire somebody skilled to come in and do some firefighting you can negotiate a very high daily rate for 6 months contract.
Also keep in mind you pay lower taxes as contractor as most of your income is via dividends. And you can also expense a lot of things you buy if it can be justified as cost of running business.
The only reason it hasn't blown up yet is that the value of € is kept low by southern European countries that are struggling to stay afloat. Since the living costs remain relatively low, employees don't have to ask for more.
Source: recruiters trying to convince me that €60k is what senior software engineers make in Germany. If you are wondering, that leaves you with €2900/month after taxes and insurance. The wonders of progressive income tax.
See also the wage inflation/unemployment relationship. https://www.boj.or.jp/en/research/wps_rev/lab/lab14e02.htm/
It wouldn't have occurred to me that Japan had a baby boom. I suppose soldiers returning home in despair or in triumph are all looking for comfort and stability.
Was there a baby boom after WWI, or the American Civil War, or other wars that siphoned off a major part of a country's young men?
[0]:https://web.archive.org/web/20090419195002/http://www.un.org...
[+]: Literally "economic miracle"
Essentially a loan to purchase US goods?
It's definitely helpful as a loan, of course.
Once communism became the big boogieman, the US did a 180 on its occupation policy, and instead started dumping money and American goods into Germany via the Marshall plan.
The US wanted to apply the same policy to Japan as well.
My parents are WW2 generation. I have never heard any complaints from them or relatives about the American behavior after WW2.
Eisenhower did want, initially, for Germany to be an agrarian society. He wasn't the only one with this view. Morganthau was not the only person with this idea.
No matter what people in DC were planning I have never heard from people who lived then about Americans getting in the way of people trying to rebuild.
This was true for Germany but not for japan. Due to hard feelings over ww2 and of course racial animosity/hatred, our plan for japan was deindustrialization. We wanted japan to be at least a few decades behind the US and turn more of their nation into docile agrarian farmers. We also instituted starvation policy to thin out and subjugate the japanese. There was rampant starvation in japan in the first few years after ww2.
We had troops specifically assigned to destroy japanese industrial/engineering/science capacity. One of the most famous was the destruction of japan's cyclotron.
Keep in mind that we were an extremely racist nation 70 years ago and we had just nuked and firebombed japan into complete rubble. Whereas germans were "our white aryan brothers" ( it's absurd to think it now, but that's how the leaders of the US thought back then ) and we felt an obligation to rehabilitate them, the japanese were viewed as inferior asians with plenty of motive to attack the US again.
The only reason japan was allowed to reindustrialize was the soviet threat and the korean war. We needed japan to help seal off the soviets, chinese and north koreans.
It's fascinating stuff. If the communist threat didn't exist and the korean war never occurred, japan might be a more agrarian society today controlled by the US administrators.
Governments can be funded by their central banks printing money.
> and a consequential push towards automation as service providers try to lower costs.
Governments can put that same automation in place to provide services with no profit motive.
[0] https://www.google.com/search?q=japanese+birth+rate&rlz=1C5C...