Japan’s Lifetime Employment vs. Taiwan’s Labor Mobility

(Continued from “Love in Japan and Taiwan: Youth Perspectives on Marriage.” and “Families: Comparing Modern-Day Japan and Taiwan.“)

Job Loss Triggering Suicide: A Japanese Peculiarity?

MODERATOR  Next, we’ll discuss labor in Japan, starting with the issue of suicide. The high level of suicide in Japan receives much attention in Taiwan, and Dr. Yamada has also written about it in relation to disparity. As the social gap in Japan widens, is it true that suicide is on the rise, particularly among men?

YAMADA  The key factor is the nature of the disparity. The cause, which I termed kibō kakusa, or the “expectation gap,” does not refer to differences in income, but whether a person can hope for a better future. Mass recruitment of new graduates and lifetime employment are the norm in Japan. In 1998, we saw a sudden spike in suicides, with an increase of 10,000 cases compared with the previous year. This was because many middle-aged and older men lost their jobs in corporate restructuring. Unlike in Taiwan, as I understand, restarting a career in Japan is notoriously difficult. If someone loses a full-time position, it’s generally hard to secure new employment with the same conditions. This is particularly true for middle-aged and older men.

But now suicide among young women is rising. Women in part-time or other nonregular, low-income employment have lost hope, and see little prospect of a good marriage, a situation exacerbated by the COVID-19 pandemic.

Europe’s unemployment rate is much higher than Japan’s, but because people have hope of re-employment, they don’t take their own lives. But despite Japan’s very low unemployment rate, people suffer a sense of despair if they lose work. With Japan’s low level of labor mobility and the difficulties faced in changing jobs, people abandon hope if they become unemployed.

LAN  In the early 1990s, many Taiwanese companies shifted their business to China or Southeast Asia. At the same time, a large number of workers came from Southeast Asia to Taiwan. The result was a sharp rise in unemployment. The hardest hit by this industrial restructuring were men with a lower educational background. Lifetime employment has never taken root in Taiwan, in large part because social mobility is more or less guaranteed, the result of Taiwan’s economy, which has an industrial structure centered around smaller companies. It’s possible to gain promotion even without a higher education, as expressed in the term “black-hands become their own boss,” which refers to mechanics who rise up to become managers.

But this has become impossible over the last thirty years. Capital has become concentrated in the manufacturing industry—essentially, the market became increasingly oligopolistic. Household expenditures on education have risen, as has the number of people pursuing higher degrees, but this caused a devaluing of education, and even university graduates can’t be sure of obtaining middle-class-standard employment. It’s possible to fall into the category of “working poor,” where working doesn’t lift one out of poverty.

Taiwan’s Youth Grapple with Skyrocketing Real Estate Prices

MODERATOR  Dr. Lan, do Taiwanese people struggle to understand Japan’s situation, where unemployment leads to suicide?

LAN  I don’t have the statistics for suicide in Taiwan at hand, but I believe we are seeing a slight increase, with many cases of suicide by carbon monoxide poisoning. [According to Taiwan’s Ministry of Health and Welfare, suicides rose slightly from 2014 to 2019, but declined somewhat in 2020.—Ed.] In the West, society provides a comparatively good safety net, but in Asia, families are expected to play that role. In the past, young Taiwanese in difficulty would be supported by their immediate family or other relatives. Now, their ability to help has waned, although not entirely. It’s rare to hear of “lonely death” in Taiwan in the Japanese sense.

Earlier I mentioned that there is much focus in Taiwan on mobility. For middle-aged and older people today, this refers to the many opportunities for social mobility that existed in the past. It was possible to start a business, salaries increased thanks to economic growth, and people could save up and buy a home. But now, housing prices have skyrocketed and are not affordable for many people. Mobility for young people today doesn’t represent stability. They tend to switch from one company to another on roughly the same income and conditions, so it doesn’t amount to a move upward. Consequently, they struggle to accumulate assets and aren’t able to start businesses. Young Taiwanese today are not blessed with the same opportunities that their parents’ generation enjoyed. Many people believe this generation suffers extremely unfair treatment, and generational disparity is a major topic in Taiwanese society.

Over the last thirty years, there has been a split between stagnating and thriving industries. Semiconductor manufacturers like TSMC have enjoyed strong growth, but their profits haven’t been evenly distributed to other segments of society. One cause is wage stagnation. Many profitable companies don’t pass on their gains to employees. Even full-time staff don’t receive pay rises. Real estate prices have risen sharply, and young people are becoming increasingly disgruntled with the strong sense that their generation is being unfairly stripped of opportunities.

Different Perceptions on Investment in Education

MODERATOR  Taiwan is seeing stagnating wages and spiraling real estate prices, and young people aren’t able to make a future for themselves without relying on their parents. How does the situation in Japan compare?

YAMADA  Real estate costs are not that high in Japan. Because we have entered a period of population decline, I doubt that we’ll see significant price hikes in real estate going forward. But there is a social gap between male full-time employees, who can expect a secure future, versus those unable to gain full-time employment, who face uncertainty. It’s not so much a matter of whether their pay is low—rather, the divide has become fixed between those with stable employment and those without.

MODERATOR  On that note, I’ve heard of Taiwanese people coming to Japan to buy real estate because it’s considered inexpensive.

LAN  I’ve also heard this. People say that Taiwan’s real estate situation resembles that of Japan during its economic bubble. They say that in ten or twenty years, the impact of the declining birthrate will cause a crash in suburban real estate values.

MODERATOR  Dr. Yamada, what proportion of Japanese people obtain full-time employment?

YAMADA  I believe the majority of university graduates are able to. There is a glaring disparity between those with a university education and those without one, though. There is also a gender gap. Men tend to secure full-time employment, while women end up in part-time or other nonregular positions. This structure that discriminates against women still exists in Japan.

LAN  This is a difference between Japan and Taiwan. It’s an issue in the structure of the labor market. In Japan, there are large differences in wages and welfare benefits between full-time employees and part-time and dispatch workers. Japanese university students strive hard in the job-hunting process, but failure to obtain a secure position has serious consequences. Your university and job have a significant impact on your future. That’s not the case in Taiwan. The majority of people change jobs frequently, developing their careers, while gaining experience and specialized skills.

In Taiwan, it’s upper-class families who place importance on investment in education. For example, they’re conscious of the value of educational investment, sending their children to bilingual schools and overseas on exchange programs so that they will cope better with globalization. This is another difference with Japan.

I’ve heard that in Japan, mothers play an extremely important role in education. In addition, foreign language education receives less attention in Japan than in other Asian countries. This is probably related to Japan’s industrial labor market. Which university you attend is considered important, with the spotlight on the University of Tokyo and Kyoto University. Parents aspire for their children to quickly secure employment at a major Japanese firm. This is another difference between Japan and Taiwan, which has greater labor market mobility not only domestically but also internationally.

Employment Continues to Offer Stability in Japan

MODERATOR  I feel that Japan could overcome its tendency to view life as hopeless for nonpermanent employees by becoming a more highly mobile society like Taiwan, where it’s possible to get by without a permanent position, and where changing jobs is seen as a positive career move. Dr. Yamada, do you feel it’s important for Japan to change the value it places on the lifetime employment system?

YAMADA  Yes, I do, and I’m also envious of the situation in Taiwan. Most advanced countries other than Japan have a high degree of mobility. I believe this lack of mobility is what has created economic stagnation in Japan over the past thirty years. Many students I teach are encouraged by their parents to seek employment in their hometowns as public servants. They want their children to come back and live nearby, discouraging them from studying English, telling them they can enjoy stability without career success. Such thinking impedes individuals from wielding their talent, and I believe it’s a factor in Japan’s economic stagnation. But it’s a difficult situation to rectify.

Japan was the leading Asian nation thirty years ago, but its living standards are now half those of Singapore and two-thirds of those in Hong Kong, and it has also been overtaken by Taiwan. South Korea will catch up to us soon. But when I explain this to students, they react indifferently. It’s not so much a cultural issue; rather, because of our large population, we can make do without globalization. The past ten years have seen a growing sense that, so long as living conditions are stable, there’s no need to aspire for more.

MODERATOR  It seems that we need to think more about the state of labor, about how we can increase worker mobility, and about household educational investment within an unequal society. Our discussion has revealed many similarities and differences between Japan and Taiwan, and also raised issues to analyze in the future. Thank you both for taking part in our discussion.

(Originally written in Japanese based on a March 3, 2022, discussion moderated by Nippon.com editor Nojima Tsuyoshi. Banner photo © Pixta.)