Workers — practice question

At the beginning of February 2017, the Japanese government launched its ‘Premium Friday’ scheme. Under this policy, employers are encouraged to let workers leave at 15:00 on the final Friday of each month without any reduction in pay. The Japanese government wants people to work fewer hours. One aim is to improve workers’ health and possibly their productivity. Fig. 1.1 shows average hours worked and productivity (GDP per hour worked in US $) in six selected countries. 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 uses only half of their paid holidays. Nearly 20 years of low economic growth and deflation have created 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 give people 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 faster than the death rate, leading to a smaller population. The government hopes that extra leisure time will encourage higher consumer spending. Greater consumer spending would support Japanese firms and reduce 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 early. In the longer term, however, the scheme may prove more successful. 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 increases job security and usually pushes wages up. In Japan’s case, however, the higher demand for labour has been matched by a larger supply. Some of this extra supply has come from migrant workers, but a greater share has come from more Japanese people working beyond retirement age and more women joining the workforce.