Fewer Working Hours Slowing Japan's Economy
Jan 14, 2011
The old trope that Japanese businesspeople are workaholics who live in
rabbit hutches may have been an accurate characterization up through the
1980s, but it is only half-true today. Many Japanese still live in cramped
quarters, but the average salaryman can hardly be called a workaholic.
That is because the number of hours worked in a year by a typical Japanese
employee has remained below the average for advanced countries since 2009.
Many Japanese economists attribute the domestic economy's sluggishness
to the fact that the population has been shrinking since 2005. And the number
of people ages 15-64 -- that is, the working-age population -- began to decrease
much earlier, starting from the first half of the 1990s.
Below average
But the average amount of hours worked is shrinking at about the same pace
as the contraction in the working-age population. According to statistics
collected by the Organization for Economic Cooperation and Development
(OECD), average annual hours worked per worker in Japan have been falling
continuously.
In 1985, the average
figure was 2,093 hours.
By 1995, that had fallen
to 1,884 hours, and the
most recent statistics
show that the average
Japanese worker put in
only 1,713 hours on the
job in 2009.
Compare this with
South Korea, whose
most recent data shows
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that the average employee worked 2,255 hours in 2008, which tops even
Japan's 1985 figure. Of the 35 OECD member countries, 28 have reported their
2009 data, with the average coming to 1,738 hours. That means Japan's figure
was smaller than OECD average for the first time that year.
People who work at private companies may question the accuracy of these
statistics when they think of the hectic days, long working hours and unpaid
overtime so common in the Japanese private sector. Meanwhile, some
observers may wonder why Greece is in such big economic trouble even
though annual working hours there came to 2,116 in 2008, second only to
South Korea.
More leisure time
But it is true that the Japanese government and companies have been
working together to slash working hours for years. Japan's workaholic nature
was criticized by foreign companies in the 1980s, when the Japan-U.S. trade
imbalance was large. That spurred Tokyo to prioritize reducing the number of
working days as a way to ease trade tensions.
The first step was to increase the number of public holidays. Japan now has
15 such holidays a year, three more than 20 years ago. Showa Day, Greenery
Day and Marine Day are relatively new additions.
The second initiative was to change the system so that if a public holiday falls
on a Sunday, the following Monday is a day off. The third initiative was to create
consecutive holidays; to the degree possible, public holidays are moved to
Mondays. Furthermore, a working day that falls between two holidays is
designated as a special holiday.
In addition to this, private companies, national and local government offices,
banks, and stock markets have gradually decreased the number of working
days per week. It used to be that people worked five days a week plus every
Saturday morning. Now a five-day work week is standard in most workplaces.
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Double whammy
Japan's working-age population stood at 87.165 million in 1995 and
decreased to 81.644 million in 2009. That represents a 6.3% decline over 14
years, sightly more than the 6.1% fall in annual working hours over the same
period. When those factors are multiplied, that translates into a roughly 14%
decline in total working hours in that period.
Looking at Germany's short annual working hours -- 1,390 in 1990 -- it is
clear that working more does not necessarily mean higher productivity or better
competitiveness. But shorter working hours should be accompanied by a more
efficient allocation of the country's workforce. If labor protection laws are too
strict to mobilize the workforce, fewer working hours will probably result in less
output.
By Masataka Maeda
Senior Economist
Japan Center for Economic Research
――――――――――――――――――――――――――――
Masataka Maeda is a Senior Economist in Japan Center for Economic
Research (JCER).
Born in 1957. In 1979, he graduated from the College of Arts and Sciences,
the University of Tokyo, and joined Nikkei Inc.. From 1991 to 1994, he was
assigned as a correspondent at the Washington D.C. Bureau in the United
States. From 1997 to March 2010, he was a Senior Staff Writer in the area of
capital market and corporate news. Since April 2010, he has worked at JCER.
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