Land of the subtle recession: The Japanese are tightening their belts, but a high demand for labour protects the workers, writes Terry McCarthy in Tokyo
Thursday 30 July 1992
However, in strictly economic terms, the cost of the current slowdown is high, and looks like getting higher. The stock market has lost 60 per cent of its value since 1989, the property market is going the same way although more slowly, corporate profits are tumbling, banks are sitting on bad debts that some economists estimate at more than 50,000bn yen ( pounds 204bn) and bankruptcies of small companies are rising quickly.
In human terms, the effects of the recession are more subtle and only barely noticeable. The fact that the unemployment rate is standing at 2.1 per cent, compared with 2 per cent at this time last year, and that job offers still outnumber job seekers, hides a quiet cut-back in paid overtime and bonuses by Japanese companies.
This summer, millions of Japanese will fly out of the country for foreign holidays but an increasing number will be on cheap tickets, as the bucket-shop travel business in Tokyo experiences a boom in business compared with the more expensive tour operators.
Summer is also a traditional time for making gifts, but this year the department stores say the expensive Y30,000 ( pounds 122) gift- box combinations of imported meats, fruits and alcohol are not moving. Instead customers are buying Y5,000 single item gifts.
So far, at least, the average Japanese salaried worker is experiencing a bit of belt tightening, but none of the economic despair that has hit huge swathes of the British and US populations. And with Japanese households sitting on one of the world's highest levels of personal savings, there are few fears for the immediate future.
The biggest difference between Japan and the West which is not about to disappear is the chronic shortage of labour in Japan. Highlighting this was a report released this week by the Japan Federation of Employers' Associations, or Nikkeiren, which said that the country will have a shortage of 6 million workers by 1996 if the economy is to grow at the government's target of 3.5 per cent annually at the same time as average work hours are reduced to the government's professed goal of 1,800 hours a year.
It is this labour shortage which makes Japanese employers so slow to lay off workers. Instead companies have been cutting their wages bill in two ways. There has been a nationwide reduction in paid overtime and this year's winter and summer bonuses are being reduced.
Bonuses are an integral part of Japanese wage schemes - in December and June employees receive bonuses which in the good days can amount to three months' salary each time. This year, bonuses are down to two months' salary or even one month's in particularly badly-hit industries.
- 1 Reyhaneh Jabbari: Iran due to execute woman for murder of her alleged attempted rapist
- 2 Sainsbury's '50p challenge' poster telling staff to encourage customers to spend more placed in shop window instead of staff room
- 3 Expert urges cat lovers to own just one animal each
- 4 Car tax disc changes: Two days to go - and they affect you much more than just not displaying a piece of paper
- 5 The Simpsons death: Creator Al Jean would 'kill himself' before character like Homer or Lisa
Expert urges cat lovers to own just one animal each
Five-year-old Iris Grace is raising awareness of autism through her extraordinary paintings
Car tax disc changes: Two days to go - and they affect you much more than just not displaying a piece of paper
Isis an hour away from Baghdad - with no sign of Iraq army being able to make a successful counter-attack
British man raped while urinating in bushes at Oktoberfest beer festival in Germany
Isis, we are told, is a 'clear and dangerous threat to our way of life'. I’m sorry, but I just don’t buy it
Exclusive: 'Putin's Russia has been my biggest regret,' says Nato's outgoing Secretary General
The Osborne Ultimatum: Chancellor’s benefits freeze bombshell will affect ten million households
'Women, walk wherever you want' posters taken down in Stamford Hill following 'unacceptable' signs separating men and women
There’s no excuse for Dave Lee Travis’s behaviour, but we need to keep a sense of proportion
Mark Reckless becomes second Tory MP to defect to Ukip in a month
- < Previous
- Next >
Very Competitive Salary: Austen Lloyd: NORTH HAMPSHIRE NQ to MID LEVEL - An e...
Highly Attractive Pakage: Austen Lloyd: MANCHESTER - A highly attractive oppor...
£40000 - £50000 per annum: Ashdown Group: Marketing Manager (Campaigns, Offlin...
£90000 - £135000 per annum: Ashdown Group: Head of Marketing (B2C, Acquisition...