
Japan labor shortage prompts shift to hiring permanent workers - oska
https://www.bloomberg.com/news/articles/2017-04-30/japan-s-labor-shortage-prompts-grudging-turn-to-permanent-jobs
======
patio11
Once again with "There are no shortages, there is merely a disagreement with
reality about how much labor costs."

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.

~~~
bostik
With an unemployment rate at 2.8%, I would say that there actually _is_ a
shortage. That figure is already lower than the expected unemployment rate at
"full employment" scenario. [0, 1]

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...](https://en.wikipedia.org/wiki/Full_Employment_in_a_Free_Society)

1:
[https://en.wikipedia.org/wiki/Full_employment](https://en.wikipedia.org/wiki/Full_employment)

~~~
Camillo
Why do we even bother discussing the unemployment rate any more? It is now
common knowledge that it does not include people who have given up on finding
a job, people who are underemployed, people who went on disability as a
replacement for unemployment subsidies, etc.

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.

~~~
mistermann
I would agree with this, governments (western at least) have distorted the
measurement of so many statistics (inflation in Canada is <2% because they
essentially exclude housing costs, as if that's a minor part of a typical
family's budget) that historical comparisons are a joke.

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?

~~~
randomdata
> inflation in Canada is <2% because they essentially exclude housing costs

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...](http://www.statcan.gc.ca/pub/62-001-x/2017003/tbl/tbl-4-2-eng.htm)

~~~
mistermann
Reading that I can see how one might come to the wrong conclusion (that actual
housing costs are what is used to calculate inflation), that is likely in fact
the intent.

The reality though is different:

[http://www.theglobeandmail.com/report-on-
business/economy/ec...](http://www.theglobeandmail.com/report-on-
business/economy/economy-lab/cpi-doesnt-fully-measure-household-inflation-and-
it-wasnt-meant-to/article15551986/)

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.

~~~
randomdata
_> Where is the money coming from to drive this housing bubble?_

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.

~~~
mistermann
If it was just Vancouver and Toronto that would be one thing, but housing
across Canada (except perhaps the maritimes) has seen huge gains in the last
decade, far beyond income growth.

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.

~~~
randomdata
_> If it was just Vancouver and Toronto that would be one thing, but housing
across Canada (except perhaps the maritimes) has seen huge gains in the last
decade_

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.

~~~
mistermann
> 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.

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...](http://business.financialpost.com/news/economy/life-after-oil-makes-
real-estate-the-new-crutch-of-canadas-economy-and-its-huge)

It's so strange to me to see articles like the above, charts like this:
[http://www.macleans.ca/economy/economicanalysis/canadas-
hous...](http://www.macleans.ca/economy/economicanalysis/canadas-housing-
bubble-looks-disturbingly-familiar/), 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.

------
marak830
I just want to chime in here: seishein(full time permanent) workers over here
get a lot of protection mandated by law. For example if my company closes,
they have to pay me 3 months of my salary while I find a new job, and I'm
quite difficult to fire.

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.

~~~
mac01021
If your company closes? Like if they go out of business? What if they don't
have the money?

~~~
kartan
> What if they don't have the money?

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.

------
csa
Japan Inc has been giving the shaft to young people with regards to permanent
worker status for about 25 years now. The conditions are such that the social
contract that some/many older Japanese believe exist is distinctly a part of
history for a lot of young Japanese. This has, imho, created a lot of
challenges related to social stability and the economic aspects related to
social stability (e.g., housing trends, marriage, having children, education,
etc.).

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.

~~~
devoply
I hope going forward humans are realizing that we don't need things, we need
social systems which function. That's much more important that the latest
doodad or car. It's more important to have good functioning social systems
which support the masses and allow them to have some sense of a life... rather
than being treated like one night stand employment agreements that we have
today... and being in a constant state of being used and under-appreciated.

------
throwawaygaijin
It is funny because I just looked at an email from HR and saw that there was 9
people "at elevated risk of Karoshi" in my department of <100 IT people.

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)

~~~
redstripe
I know it's cynical but it feels like the term "labour shortage" is just a way
of complaining about not being able to find desperate laborers at bottom
dollar. Here in Canada, I've seen plenty of job ads that were more or less "we
have job, come work here". It's like they don't even try and then proceed to
step 2: complain about the labor supply. I can only image that the situation
is a lot worse in a country that overworks it's people as much as Japan.

~~~
microcolonel
I think it's a bit judgemental to say that Japan overworks people, the place
functions to some of the highest standards, and excels in many ways like
nowhere else in the world.

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.

~~~
patio11
Japan is a big country and there are people with diverse views in it. Overwork
is widely recognized to be a societal problem here, in the same fashion that
e.g. racism is widely recognized to be a problem in the US. You could
certainly find people who disagree with either conclusion, but you could also
find people who disagree that the earth is round.

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.

------
thedailymail
Another major change not mentioned in the article is the revisions to Japan's
labor law that now makes it a requirement to hire any "fixed-term" (=yearly
contract) worker who has been at the same company for five consecutive years
on a permanent basis from year 6, or else terminate employment by the end of
year 5. This will go into effect for people who have been working at the same
place for years at the end of this fiscal year (March 2018). There are still
some differences, such as lack of a retirement bonus and there may be some
lingering status issues ("tenured" staff traditionally rank higher).

------
ericdykstra
I live in Tokyo, and I've seen this trend in action. Jobs that would almost
certainly be part-time in America, such as chain yoga or exercise class
instructors, are often full-time employees.

~~~
ramchip
I think haken is a very common though, for all kinds of office workers. It's
full-time employment, but it's not permanent employment.

------
welanes
This is good news. For those who have not seen it, _Japan: A Story of Love and
Hate_ ([https://www.youtube.com/watch?v=QH-
kNnq7mFM](https://www.youtube.com/watch?v=QH-kNnq7mFM)) is an excellent - and
often poignant - window into the life of a Japanese temp* worker.

* temp: working 15 hours a day in three jobs.

------
ekianjo
That's not going to increase consumption demand on the market. New workers in
Japan and especially wary about the future and are not like the spenders of
the Bubble 時代.

~~~
hkmurakami
If there's one word to describe the Japanese population, I would choose
"realists".

Sharp contrast to the eternal optimist, borrower spender American stereotype.

~~~
hn_throwaway_99
Seems like some irony/self-fulfilling prophecy going on here, though. The
optimist, "borrower spender" American is another side of the same coin that
values risk taking and has tolerance for failure. If you are _too_ "realist",
your reality might actually end up being worse than if you were an optimist.

~~~
doctorcroc
You're both right, and that's the beauty of culture. The double sided sword
yields both benefits and disadvantages. The irony is that America's historical
appreciation of immigration (one of the best ways to mitigate cultural blind
spots) has yielded a backlash against the lack of a cultural bedrock, and
become a double edge sword itself.

~~~
krapp
> The irony is that America's historical appreciation of immigration (one of
> the best ways to mitigate cultural blind spots) has yielded a backlash
> against the lack of a cultural bedrock, and become a double edge sword
> itself.

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.

~~~
mistermann
Are there upper limits to the level of immigration before this bedrock starts
to deteriorate? I was out at a park on the weekend and I'd estimate less than
25% of the people there could speak the same language as me. Does an inability
to verbally communicate with my fellow citizens really not affect anything?

~~~
tptacek
You were at a park in the US and less than a quarter of the people there spoke
English? Where was this park?

~~~
mistermann
Sorry, Vancouver BC Canada.

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.

~~~
krapp
You have an entire _province_ that refuses to speak English. Your argument is
invalid.

~~~
mistermann
Quebec, founded in 1608 (well, Quebec City), a semi-sovereign nation in Canada
whom we literally fought a war with in the past, is not really comparable to
the situation in Vancouver. I don't think it's my argument that isn't valid.

