Japan's rise to economic prominence following the booming decades of the 1970s and 1980s placed the nation at the forefront of the global economy, but has also yielded a number of consequences for the Japanese workforce.

by Alison Brailey (UCLA 2017)

UCLA International Institute, October 20, 2016 — At a recent event sponsored by the Terasaki Center for Japanese Studies at UCLA, Professor Andrew Gordon spoke on structural inequalities built into the Japanese labor market. Gordon is the Lee and Juliet Folger Fund Professor of History at Harvard University; his work focuses on modern Japan. The talk was drawn from his project on the contemporary historical context of Japan’s “lost decades” of the 1990s until today.

The Japanese economy has seen a number of significant changes since the 1980s, including rapid growth and technological innovation, as well as the more recent stagnation. Although the advances of the small island nation has most certainly caught the eye of the international community, the structure of the Japanese labor market has remained largely overlooked. That structure has strictly segmented Japanese labor and created inequalities that plague millions of workers. Most importantly, argued Gordon, the emergence non-regular employment has come to dominate the Japanese workforce.

The issue of non-regular labor

Gordon focused on the separation between regular and non-regular labor, which he called “an awkward term” because it refers to various forms of employment, including part-time workers, casual hourly workers, contract workers and dispatch laborers — all of whom are increasingly common and whose jobs represent important positions in the Japanese economy.

These sorts of jobs are not inherently problematic, but the workers who hold them face a number of challenges that those with full-time regular jobs in the formal economy do not.”[A]cross the board, non-regular jobs offer lower wages than regular employment,” said Gordon. “[And] they offer less job security than regular employment.

“Non-regular employees also have less access to job training — formal or informal,” added the speaker. “They have weak prospects for career development. And a great concern in policy circles is that non-regular male workers are much less likely than regular male workers to get married and have children.”

In a country facing negative population growth, growing demand for elderly care and rising income inequality, the realities of non-regular labor are concerning, to say the least, emphasized Gordon.

Evolution of the Japanese labor market

“The rise in non-regular employment has been underway in a dramatic way for about three decades,” remarked Gordon. “In 1982 there were under 7 million people in non-regular jobs, and by 2014, well over 20 million people. So I think this is the most important shift in Japanese employment over the last three decades.

“One could argue that it is the most notable change in Japanese working life since the 1960s.” continued the speaker. This phenomenon is extremely important to understand, but he cautioned that it was also very complex.

Studies of Japanese labor dynamics often identify the entry of the Japanese economy into a global market as the driver of non-regular employment. In response to the stagnation that followed the boom years of the 1980s, the government and employers worked hand in hand to remove labor regulations and increase control over costs, offering a free-market solution to the halt in corporate growth. While this decrease in regulation is an important factor in a changing labor market, said Gordon, it’s not the full story.

Within each sector of the Japanese economy, a rise in non-regular labor has been documented over time. But it is the service industry that has become overwhelmingly dominated by non-regular employment. Health care work in particular was one of the earliest fields to face deregulation and continues to have one of the highest rates of non-regular employees. Yet health care, like the service sector as a whole, is largely insulated from the global economy. Gordon therefore argued that internal factors of the Japanese labor system were significant.

Three-way segmentation of labor

Over the years, three stark divisions within the labor market have separated regular and non-regular labor in Japan. The first began with “collar line” between white and blue collar jobs. As early as the late nineteenth century, college-educated men began securing the majority of high-paying regular jobs, while blue collar workers were granted few benefits or securities. The second division arose with the differentiation between large and small firms in the 1920s and 1930s, with workers in small firms facing many of the same inequalities in benefits and protections.

Lastly, and arguably most importantly, gender segmentation of the labor force occurred once women in Japan began working in large numbers. Many women were pushed into non-regular employment without many opportunities to transfer into regular jobs.

Many of the concerns related to inequities associated with the collar line and firm size have been addressed and, to a certain extent, rectified by government-mandated employment practices. For the most part, the number of male workers in regular versus non-regular jobs is not dependent on job type or firm size. This means that generally, Japanese men can readily access regular employment if they want it. But gender segmentation remains a very real and growing issue for female workers.

Morning in Japan. (Photo: Toru Watanabe/Flickr, 2008; cropped). CC BY-NC-SA 2.0.

Placing a magnifying glass on gender and generation

“It is very hard for both men and women to move from non-regular to regular status, [but] it is a lot easier for men to do [so],” said Gordon, noting, “It is about twice as unlikely for a women to leave a non-regular job and get a regular one than it is for a man.”

Historically, this has to do with the idea that women’s work is secondary. The perception of women as needing protection, as well as the pressures on women to fulfill familial roles, has led them to occupy the majority of non-regular jobs in the Japanese economy.

The good news? The situation may be beginning to change. Based on survey responses of adult women who have already entered the workforce, Gordon said, “A little under a half want to get regular jobs. So it’s not a majority, but it’s a significant, frustrated minority. And that, to me, does suggest from the ground up, this notion of women’s work as secondary is beginning to lose its legitimacy in society as a whole.”

Perhaps the most important point made by Professor Gordon is that for the good of the Japanese nation, people should come first. Not only does the rise of non-regular employment in Japan translate into the institutionalization of contemporary gender inequality, but it also indirectly reduces the national birth rate and limits consumption and purchasing power. In the long term, both the people and the economy will suffer as a consequence.

Published: Thursday, October 20, 2016