The Particular Features Of The EmploymentSystem In Japan One of the unique and well known features of theJapanese employment system is permanent employment forworkers. Japanese corporations responses to recessionaryperiods provide an opportunity to sort out the myths from therealities of the Japanese permanent employment system. During recessions Japanese companies forced to reducetheir costs achieve reductions in several ways. First, theyreduce the number of women and temporary workers they employ.During the recession that followed the 1973 oil shocks femaleemployment dropped by eleven percent; more then five timesthe drop in male employment. It was easy to reduce femaleemployment because women even if they hold permanentpositions are thought of as transitory workers who will leavethe workforce when they get married. Female and temporaryworkers are a safety valve for Japanese companies that allowthem to reduce costs in the short-term without firingpermanent male workers. The second way Japanese companiesreduce costs is by giving early retirement to senior workersat the company. Many of these workers forced into earlyretirement then take up farming as is the custom in Japan forretires. Getting rid of senior workers is one the mosteffective tools companies have of reducing costs becausethese workers have more seniority and thus make more moneythen the average worker. Japanese companies also are able tocut costs during recessions by reducing or eliminatingbonuses paid to workers, cutting down on hiring of newworkers, eliminating the farming out of work tosubcontractors, transferring workers internally with in thecompany to subsidiaries, and reducing profit margins tolevels that many American companies would findintolerable.
Japanese companies response to recessions shows thebenefits and disadvantages of their employment system. Someof the benefits are that loyalty and labor relations are verygood. This is due to the fact that for non-temporary maleworkers not yet near retirement age companies make a greateffort to continue the permanent employment system evenduring recessions. Most young male workers once entering acompany stay with it for their entire life and for themJapans permanent employment system serves them well. Theseworkers come to view their company as almost a benevolentparent; the company leads them through fitness drills,training camps, and retreats. A workers identity is shapednot by their individual title but by the company they belongto. But, female, temporary, and senior workers wind up payingthe price of this permanent employment system. Women who wantto work in a long-term position for a company lose their jobswhen recession hits. And because many women who lose theirjobs become housewives and don’t apply for unemploymentinsurance they become the invisible unemployed, uncounted bylabor department statistics. The “permanent”employment system in Japan is only a permanent employment fornon-temporary male workers not near retirement age, duringrecessions when companies are forced to cut costs mostlyfemale, temporary, and elderly workers wind up loosing theirjobs.