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Japan's job-for-life culture has survived war, earthquakes and now a pandemic

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Nanami Kodaira hasn’t worked since her hair salon in Tokyo cut its hours in April in response to the coronavirus pandemic.
Tokyo (CNN Business)Nanami Kodaira hasn’t worked since her hair salon in Tokyo cut its hours in April in response to the coronavirus pandemic.
„I don’t blame my boss,“ Kodaira said. „I am not the only one.“
But Kodaira isn’t counted among the 1.9 million people in Japan who didn’t have jobs in May, accounting for 2.9% of the workforce.
Instead she’s one of the 4.2 million people who are still getting paid a portion of their salaries — in her case, about 75% — for the time she’s not at work. While the number of such people improved slightly in May from April’s record six million, it’s still nearly three times higher than it was in January 2009, during the global financial crisis.
Takuya Hoshino, an economist at Dai-Ichi Life Research Institute, has calculated that Japan would have a jobless rate of 10.2% for May if those on leave were factored in.
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„Even after the state of emergency was lifted, the number of people on leave is still very high. That’s unexpected and very grim,“ Hoshino said.
A serious threat
While the millions of people in Nanami’s position suggest that Japan has avoided the mass layoffs seen in countries like the United States, economists say it still masks a serious threat facing Japan, which is already mired in recession.
That’s because Japan’s practice of holding onto workers through economic tumult could actually backfire, they say, since doing so could make companies and their employees less nimble. One-fifth of the working population has been employed with the same company for more than 20 years in Japan, or double the comparable figure in the United States, according to government data.
Japan just fell into recession, and much worse could be on the way
„The biggest issue in Japan’s labor market is the stubborn insistence on pay by seniority. If genuine merit-based pay were introduced, there would be much more job switching and career climbing,“ said Jesper Koll, a senior adviser to the fund management company WisdomTree.
Legal hurdles also make it more challenging for companies in Japan to cut jobs compared to their western counterparts.

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