Catherwood LibraryILR School

Information released Wednesday shows that Japan's economy has suffered its worst contraction in nearly 50 years, and yet unemployment in the country has remained steady, and almost 4 percentage points lower than in the United States. This is largely due to government subsidies which support a long-time tradition of life-time employment. If employers have to cut costs they reduce bonuses or fire temporary workers, they do not fire regular employees. Instead they find the workers something else to do - one company planted a vegetable garden, one did paid community service, the wages partly subsidized by the government. Although this guarantees secure jobs and often improves employee-employer relations, it can also lead to falling wages, lack of full-time work, a blockade against workers from the younger generation, or an excess of non-competitive businesses still in operation. Part-time workers, with few benefits, now make up one third of Japan's workforce.