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Japan’s Job-for-Life Ethos is Dying a Death

There used to be something of a script for a Japanese middle-class, white-collar life. Freshly minted graduates would enter a company where they would stay for the rest of their careers. For women, that job lasted until marriage or the birth of a first child. For men, it lasted until retirement.

Young businessman who walks with superior
Michael Hitoshi | Photodisc | Getty Images
Young businessman who walks with superior

In exchange for hard work and general submission to the corporate will, the archetypal salary man – or sarariman – could expect security and the gradual uptick of seniority-based pay. Living standards rose, delivering an increasingly comfortable life.

But this narrative is beginning to look like a period drama. The middle-class certainties of the postwar era have been eroded by the low growth and economic dislocation that followed the bursting of Japan’s 1980s asset bubble.

Tokyo residents Raisuke Furukawa, 31, and his wife, Etsuki, 36, started their careers in classic fashion. He joined a major department store chain in 2003, and she joined a trading house in 1998.

Far from the start of a job for life, however, this was merely an opening act. Mr Furukawa is now on his third employer. Mrs Furukawa is on her sixth.

Indeed, Mr Furukawa says that by the time he graduated, any illusions of future job stability were erased by a spate of large corporate bankruptcies at the time. He also saw a troubled future ahead for department stores, once the champions of Japan’s retail sector, but which are now struggling to compete with more focused shops and the internet. Revenues at his company were falling and older middle managers were vulnerable to cost-cutting lay-offs.

Such a fate, now common, would have been an aberration for their parents’ generation, Mr Furukawa notes.

“When they were our age, 30 or 40 years ago, Japan was still in its high-growth period and because of that salaries would rise every year,” he says. “When the economy was rising, psychologically they had it easier than us. Nowadays there’s a lot of uncertainty and gloomy talk about the future.”

The National Tax Agency says average annual salaries, including bonuses, fell in nominal terms every year but one in the decade to 2009, sliding 12 per cent from Y4.61 million to Y4.06 million ($52,000). Repeated bouts of deflation mean real incomes have fallen less, but analysts say lower bonuses and salaries have further undermined already weak consumer sentiment and therefore reduced overall economic growth.

Japan used to congratulate itself on being a middle-class society, a definition based in part on government surveys that showed more than 90 per cent of citizens defined their economic position as “lower-middle”, “middle” or “upper-middle” as opposed to “higher” or “lower”.

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FT

Such self-assessment has changed only slightly in the past two decades, but the self-congratulation has been replaced by anxiety about job security and growing inequality.

Japan’s biggest manufacturers now rely heavily on contract labour, leaving around a third of the workforce without even the much-reduced security of a staff position. Sociologists fret about the emergence of a new class of “working poor”.

Indeed, poverty rates rose sharply from the mid-1980s to the late-2000s, with nearly 16 per cent of the population living on less than 50 per cent of the median household income by the end of that period, according to the Organisation for Economic Co-operation and Development.

With two salaries – each close to the national average – the Furukawas are far from poor. They have a small but nice flat in one of Tokyo’s leafier neighbourhoods, take a foreign holiday once a year and are still able to save much of their income.

Yet like middle-class peers around the developed world, they wonder how to shoulder the cost of expanding their family. Both went to private schools, but that looks unaffordable for their own offspring. They once imagined having two or more children; now budget considerations are nudging them toward settling for one.

But along with uncertainty has come flexibility, even freedom.

Mr Furukawa left the department store for a better-paying internet-related job at a small company, then took a substantial pay cut to take his current job at a digital start-up.

Such ventures are risky, but he takes heart from the knowledge that the internet and social change is making it much easier to start new companies in Japan than it was for past generations. “I have confidence that I can do something,” Mr Furukawa says.