When Masataka Kawakita, 33, informed his family and friends he was shifting companies, no one could believe he would make such a drastic move.
It was unthinkable - even though he insisted that he was making the change (after 11 years with the same firm) in the interest of furthering his career.Within a month he had left his company despite trepidations of his wife and colleagues, abandoning the safe rewards promised by his (and his company's) previous commitment to life-long employment. In Mr. Kawakita's case, he evidently was convinced that the new corporation offered him a chance to show what he could do, what his abilities add up to. This was more important to him than continuing to lock himself solidly into a seniority system where advancement would be steady but slow.
Until recently it was fortunately relatively simple and almost straightforward to describe how Japanese labor works, because there was almost total unanimity among serious commentators in their analysis of its structure and approach.
Basically, Japan has during the last century or so adopted much of the Western labor structure of capitalism, copying it with reasonable faithfulness, but limited comprehension, and carefully mixing it with feudalism, so that, although the results have admittedly been excellent, at least up until now, but are increasingly cropping up because of some built-in imperfections in the system. What are these imperfections? The system of life- long employment combined with rigid adherence to guaranteed seniority (and a passion for committees), tends to stifle all initiative. The result has been a docile work-force, not given to turnovers or strikes or other serious disputes - but one all too frequently lacking in initiatives.
Frankly, it is astonishing that Japan's economy has functioned as well for so long when industrialists have been precluded under the system from responding to downturns by promptly reducing their labor forces, and when employees could not easily leave voluntarily to seek better opportunities elsewhere. If they did, they branded themselves as disloyal, and therefore, of course, unemployable. Yet major changes are gradually taking place at last.
Company loyalty is no longer as strong as it once was in Japan. Still, since an employee is not really a welder, a salesman or a research department manager, but rather a Sumitomo man, or a Hitachi man or a Mitsui man, production could be planned flexibly. Japanese employees can be shifted easily to new jobs and new technologies can be introduced rapidly and without labor troubles. Retraining is accepted without question.
Nonetheless, employees such as Mr. Kawakita are beginning, albeit at a slow rate, to change companies despite the high personal costs involved. Any employee in Japan knows that switching firms is going to prove expensive, hence the numbers remain small. Going to another company at age 25, for instance, will cost a Japanese worker approximately $188,311 in his life-time income because wage and retirement benefits are based upon the life-time employment system. If he changes employers at age 35 the penalty can add up to something close to $376,623. Obviously, such a potential decrease in income blocks many Japanese from shifting their alliances even should they wish to do so for one reason or another.
These figures are based upon life-time income tables that show that the total of regular salaries, bonuses and retirement allowances averages out at around $1,328,961 for each worker who remains with the same firm from the beginning of his career until retirement. Thus, at least for the moment, the backbone of the Japanese labor system continues to be firmly rooted in binding the worker to the company.
If the employee shifts firms, he knows that the differences in the lengths of service between himself and workers at his corporation will be reflected in the size of his retirement allowances and pensions.
Another aspect of the situation that tends to discourage changing companies is the fact that the nation's economy is in a slowdown phase and unemployment is rising (it is now at a record 2.9 percent or almost 1.7 million). Some economists believe that the figures would be considera bly higher if the government calculated unemployment in more realistic terms. For instance, those retired but seeking work are not generally counted. In any event, there simply are not all that many positions available for those seeking to switch from one firm to another these days even if the second firm would welcome them.
From a third angle, many of Japan's basic industries and those strongly export-oriented currently are involved in on-going rationalization programs resulting in drastically slashing of their work forces through voluntary early retirement schemes. So there are many more people in the market for jobs.
It could be, however, that the life-time employment system finally is beginning to lose its attractions, because there are signs (still very faint) that relatively young men like Mr. Kawakita are gradually finding it easier to change jobs while in their 20s and 30s.
Japan's Ministry of Labor only recently discovered that young employees are becoming increasingly disenchanted with their work. A nationwide survey conducted by the ministry of 20,000 company employees below the age of 30 revealed that one out of every three had changed jobs in the past and that the same percentage of them hope to do so in the future.
Granted that there could be some distortions here, in that most likely those who switched jobs did so in their very early twenties when they had not not yet been employed on a life-time basis. Probably many of them were still part-time employees while attending college classes. But the ministry was discouraged to find out that, unlike in the past, nearly two-thirds of these young men and women replied during the survey that they regard work merely as a means to earn a living.
It is also becoming clear, much to the disgust of the older Japanese who have long considered hard work a patriotic duty, that the country's traditional life-time and seniority-based employment system is finally starting to erode. Young Japanese workers apparently have much less concern for the welfare of their firms and hope to maintain their jobs while doing only what they are required to do and little more.
Salaried workers in Japan evidently were particularly outspoken when questioned during the survey, responding that they considered their jobs hardly something representing the purpose of life itself. They all too frequently rejected the suggestion that they might be prepared to assume greater responsibilities, a point of view almost totally opposed to the usual concept accepted by their parents.