Company restructuring choices tend towards lower wages and ‘voluntary departures” for those close to retirement rather than by redundancy procedures. “Such lack of flexibility in human resource management does at least afford a tiny amount of protection from redundancy for certain employees. At the same time however the precarious nature of employment is one of the biggest problems Japan has to face.” Thus is the assessment of Yoshio Higuchi, Economics and Labor Professor at the Keio University and head of the Government Commission on labormarket reform, who expects the redundancy restructuration choice to become more frequent because of pressure from Chinese competition.
The price of the social contract. From the 20s until the economic growth bubble burst in the 80s, the Japanese labor market was synonymous with ‘jobs for life’. Businesses were committed to retaining staff until their retirement age (60). This ‘moral’ contract brought employees job security, guaranteed pay, and continuous training and in return employees adhered unwaveringly to the company’s objectives. But to manage this cohort that businesses find very costly to train in new technologies,...
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