Items filtered by date: January 2011

The Land of the Falling Sun

Friday, 28 January 2011 22:24
Post-Industrial Japan’s Developing Caste and Generational Inequality are Strangling Younger Workers 

In an ominous warning to other, post-industrial developed economies, Japan seems mired in an economic straitjacket decades in the making. A majority of its younger workers are unable to find permanent, regular jobs, and feel increasingly marginalized. Instead, Japan’s corporate structure is geared towards protecting its aging population and bloated pension systems.

A recent article in the New York Times, here, highlights the individual distress felt by its young workers. Amazingly, this has resulted in a “brain-drain” of highly educated Japanese to other countries and threatens to stunt economic growth for generations. This generational inequality is partly to blame for Standard & Poors recent downgrade of Japan’s sovereign debt.

Last year, nearly 45% of young workers held “irregular” jobs, akin to contract labor in the United States. These jobs offer low pay, no benefits, and no pension. Only 56.7% of university seniors received job offers in 2010, an all-time low.

The graying of Japan and its reluctance to undertake the structural changes necessary to include young adults in its economy is producing a new, “lost generation” of disenfranchised youth. These second-class citizens will endure a rapidly-declining standard of living and a widening gulf between the “castes”.

The cultural ethos prevalent in Japan encourages conformity and obedience. Japan’s economic engine thrived on this ethos and their ability to mold university graduates to the firm’s culture. This allegiance to the firm produced a robotic, nearly mechanical worker whose primary goal was the maximization of firm profits and revenue growth.

Unfortunately, this ethos is obsolete, and Japan’s near absolute reliance on this standard has stunted the growth of individualism and entrepreneurship. Japan has few initial public offerings, and Japanese entrepreneurs primarily skew older.

 

Category: The Economy