Workers — practice question

At the beginning of February 2017, the Japanese government launched its ‘Premium Friday’ scheme. Under this plan, employers are encouraged to let workers finish at 15:00 on the final Friday of every month without any reduction in pay. The Japanese government wants to cut the number of hours people work. One reason is to improve workers’ health and possibly their productivity. Fig. 1.1 shows the average number of hours worked and productivity (GDP per hour worked in US $) in six selected countries. Fig. 1.1 is a bar chart showing six countries: France, Germany, Japan, Mexico, Russia and South Korea. For each country there are two bars. One bar shows average hours worked per week. The other bar shows productivity (GDP per hour worked in US $). Almost one quarter of Japanese workers work more than 50 hours a week, and some do more than 25 hours overtime a week. The average Japanese worker takes only half of their paid holidays. Nearly 20 years of weak economic growth and deflation have produced a feeling of job insecurity. Trade unions in Japan have been focusing on trying to secure shorter working hours. The government believes that fewer working hours would leave people with more time to bring up a child and care for elderly relatives. Japan’s birth rate has dropped every year for the last 36 years, and it has fallen more quickly than the death rate, causing the size of the population to fall. The government hopes that more leisure time will lead to higher consumer spending. Increased consumer spending would help Japanese firms and would lower the risk of deflation returning. The first reaction to Premium Friday was disappointing. By the end of February 2017, only 4% of Japanese workers left work early. In the longer term, however, the scheme may work better. This is because unemployment in the country had fallen, with only 2 million out of a labour force of 66 million being unemployed at the end of February 2017. Low unemployment raises job security and usually pushes wages up. In Japan’s case, however, the increased demand for labour has been matched by a greater supply. Some of this extra supply has come from migrant workers, but a larger share has come from more Japanese people working beyond retirement age and more women taking paid work.