Japanese Government backs bill aimed at reducing culture of overwork
What's going on?
Japan is trying to change its culture of long working hours and employees not taking their allotted vacations days. The government, backed by Prime Minister Abe Shinto, is supporting corporations new policies aimed at reducing hours spent in the office by workers. Although previous attempts at changing the culture have failed, last week the government submitted a bill, which would require all Japanese workers to take at least five paid holidays a year. One controversial part of the bill would require workers in higher income sectors to be paid by performance instead of hours worked. Japanese workers on average only take 50% of vacations days offered, with only South Korea ranking lower.
What does this mean?
Both globally and in Japan working cultures are shifting as the model of workers staying with one company their entire careers has changed to millennials who change jobs every few years. Furthermore, millennials tend to care more about their working environment. Japan previously had a very strong culture of company loyalty and long hard working hours, the intensity of which is evident in the high number of deaths resulting from overwork and employees feeling guilty about leaving the office early. The culture of working long hours also had societal impacts as Japan has suffered from a declining birth rate. Prime Minister Shinto hopes that the new bill will help to shake up the labor market thereby increasing economic prosperity and improving societal wellbeing.
Why should I care?
If you live in Japan and are going into the job market you will probably be pretty excited by the new bill. Prior attempts to reform the work culture have failed, so only time will tell whether this new bill will produce the desired results. If the bill does increase worker productivity it will potentially increase economic growth, which would provide some future investment opportunities in Japan. One opportunity would be to invest in Japanese publically traded companies that are enacting similar new rules to attract the brightest young Japanese workers. These most innovative companies will win in the talent war and may prove to be a prudent investment. One should also keep an eye on whether the bill’s passage will improve the Japanese economic situation, and if so what investment opportunities open up as a result.
Originally posted as part of the Finimize daily email.
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