Can a four-day work week solve Japan’s labor market problems?

As the pandemic destroys traditional mentalities around work, Japan seeks to push forward ambitious reforms.

National media reported that the government plans to include the promotion of a four-day work week in its basic policy on economic and fiscal management and reform, which is expected to be approved in June.

If the policy is on the priority list, it will be reflected in next year’s budget and will likely encourage more companies to introduce the four-day work week option.

The plan the government can imagine is that people who get extra days off will have time to study and learn new skills or take part-time work to improve their careers, which will improve their productivity. and increase their income while doing work. more fluid market.

But some experts have expressed doubts, saying things probably won’t go that smoothly.

“I think it’s good that people can reduce their working days, but the critical point is whether they would accept a drop in their income,” Hiromi Murata, a labor specialist at the Recruit Works Institute.

A shorter work week will affect their pension and retirement bonus, so those who wish to make this change should check with their company about their wages and also whether they can flexibly return to a five-hour work week. days, she said.

Murata added that some people might try to cover the loss of income by taking on a side job, but they need to be careful with these plans as they could end up working long hours to manage both jobs.

The government is apparently considering a system where individuals can choose a four- or five-day workweek, rather than leaving companies to decide.

Polls show that a majority of workers have positive opinions about four-day work weeks. An online survey of 400 people in April by the Tokyo-based Financial Academy shows that 77% of respondents are either in favor or in favor to some extent.

Yet pay cuts are cause for concern and this is the main reason cited by those against the four-day work week.

According to a Ministry of Labor survey conducted in January last year, 8.3% of 4,191 companies surveyed gave more than two days off per week.

Based on some of the companies that have already introduced such working methods, two basic pay systems should be common.

A system would keep wages at the same level by making employees work the same number of hours for four days. The other would simply reduce workers’ wages because of the reduced number of working days.

The income levels of those who choose the first option may appear to be unchanged, but due to the longer regular working hours, these employees will likely receive less overtime.

In many cases, “it’s virtually inevitable that incomes will decline” for those who take three days off, said Toru Suehiro, senior economist at Daiwa Securities.

“It would be better if workers could produce output in fewer hours by increasing productivity, but this is not possible all at once.”

Suehiro estimates that the four-day work week will reduce workers’ monthly income by an average of 51,000 yen.

The timing for such a change is also not ideal, as a multitude of companies are suffering from the pandemic and rely on financial support from the government to keep their employees. So, if companies introduce a four-day work week, they can be blamed that their intention is really to reduce labor costs, Suehiro said.

“Having more free time is a positive thing, but it comes with a negative factor in lower income. We have to look both ways, ”Suehiro said.

The idea of ​​promoting the four-day work week was discussed by the Council on Economic and Fiscal Policy, a key economic policy group in the government, while a group of lawmakers from the ruling Liberal Democrats also proposed the idea in April.

The LDP proposal states that although the national tradition of lifelong employment has contributed to the stability of the country, Japan should diversify its working style to facilitate innovation by bringing people from different backgrounds to work together.

If people can take three days off a week, they will have more time to balance work with raising children or looking after their parents. It will also allow them to attend university or acquire other jobs to gain more knowledge and experience for their careers, the proposal says.

The real objective of this policy therefore seems to be to encourage people to engage in continuing education to acquire new skills for their careers, which could translate into increased productivity and displace part of the workforce. work towards growing sectors of activity and often at the heart of chronic work problems in Japan.

Experts welcomed the option of a new style of work, but said it was doubtful that the four-day work week was an effective policy to address these issues.

Murata of Recruit Works said many of those who opt for the switch are likely to use the extra time for leisure rather than studying, as Japan’s educational infrastructure is not well prepared for part-time students at this point. .

Suehiro of Daiwa Securities echoed this sentiment, saying it will take time to develop such educational opportunities as well as a new work culture.

Proponents of the policy may think that “if workers get more days off, they will be motivated to do further training and productivity will simply improve, but the cause and effect logic seems weak,” said Suehiro.

Without proper preparation of the company as a whole, “(the four-day work week) could be nothing more than a reduction in costs.”