By Jack Norman of the Journal Sentinel staff
March 23, 1998
Tokyo -- When was the last layoff at Toyota Motor Co. in Japan? The Toyota
executive searched his memory: "Not in my lifetime."
"Not yet," added his colleague, with a nervous chuckle.
White-collar insecurity has hit the country known the world over for lifetime job security. The reality of lifetime employment in Japan was never as good as the image. At best, the job guarantee applied to about one man in three, and virtually no women. Still, the lifetime deal has been a pillar of the Japanese employment system since the 1950s. More than just a nice benefit, it was a two-way commitment, unwritten but rarely breached, between worker and company, to the advantage of both. Companies could invest in training young employees, secure that the workers and their knowledge would remain within the firm. Workers could make sacrifices when young, secure that the company would not jettison them before they could enjoy the high wages seniority would bring. But Japan's long postwar run of rapid growth collapsed at the end of the 1980s, and its employment structure began to wither. "One condition was indispensable for lifetime employment: high economic growth. But the bubble burst, so long-term employment is no longer sustainable," said Masayuki Nakai, chief of the employment policy division at Japan's Ministry of Labour.
Japan's woes, sparked by a collapse in the value of overpriced real estate, predate the new financial crisis now sweeping through Asia. Still, because of its close ties with Southeast Asia, in banking and manufacturing, that crisis is making Japan's recovery even more difficult.
Long-term employment has become too expensive in an age of slower growth, because the work force had aged along with the economy, and was earning the high wages promised -- and deferred -- from its youth. "The coverage of lifetime employment used to be one-third, and now is down to one-sixth," said Tadashi Hanami, director-general of research at the Japan Institute of Labour, a government research institute. In its place are big increases in employment practices long familiar in the United States, said Hanami and others: part-time and temporary workers, outsourcing, merit-based rather than seniority-based pay, older workers pushed into early retirement. "The insecurity is starting to be apparent among white-collar workers," said author and social critic Satoshi Kamata.
For Hisako Shimamoto, who worked for an insurance company in Tokyo, the experience came about two years ago "when I was called by my boss and told to sign my name on a document forcing me to retire." Shimamoto, who is in her 50s, had little recourse, since age discrimination is not prohibited. "I tried the government's Labor Standards office, but they didn't listen to me. The company had a union, but they didn't defend me. A lawyer didn't listen." She eventually contacted the Tokyo Women's Union, one of Japan's new-style unions formed in 1995 to help women, who are generally unrepresented by company-based unions. After a five-month campaign that generated national publicity, she won a cash settlement from her former employer. The publicity worked, because public shaming is still an effective weapon against companies.
Shimamoto's willingness to challenge her dismissal is rare. The company loyalty that is such an important element of lifetime employment has weakened peoples' willingness to challenge dismissals, said Kiyotogu Shidara, executive director of the Tokyo Managers Union, a 4-year-old advocacy group for the growing number of dismissed white-collar workers. The loyalist mentality -- and a fear of being cut off from the company benefits for long-term workers, such as subsidized mortgages or rent -- "deprives corporate workers of their own judgment," said Shidara.
Still noticeably absent in Japan is one of America's dominant employment practices: massive layoffs resulting from corporate restructuring. There have been a few cases of big layoffs -- most recently because of company collapses in the financial sector -- but nothing remotely on a scale familiar to Americans. It's a fear of U.S.-style layoffs that underlies much of the white-collar anxiety in Japan. "We'd heard of U.S. layoffs, and thought it was dreadful, drastic, cold," said Munehiro Ichikawa, president of Japan Hollow Steel Co., a Tokyo-area parts supplier to a truck manufacturer. Hollow Steel last year slashed its work force from 92 to 40. Ichikawa's firm is a small one, where failure and layoffs are more common than at the big, well-known companies. The big fear is that what happened at Japan Hollow Steel might happen at the huge, brand-name companies.
"We've never had big layoffs," said Eiji Ogawa, a management professor at Chukyo University in Nagoya. "Suddenly, we have seen that possibility." (c) Copyright 1999, Milwaukee Journal Sentinel. All rights reserved.