JUNE 26, 2017
Japanese millennials are increasingly opting for a job for life over moving employers regularly, potentially undermining the Bank of Japan’s efforts to stoke inflation and growth, reports Bloomberg.
In demonstrating a strong preference for job security, Japanese workers in their 20s are bucking the trend set by both their older compatriots and members of their generation overseas, with only 6.9% of those aged 25 to 34 switching jobs in the last year.
A survey by the Japan Institute for Labour Policy and Training suggests that 55% of those in their 20s agreed with the idea of spending their entire lives at one company (up from 34% in 2004), with nearly nine in 10 also saying that they supported the idea of lifetime employment (up from 65 % in 2004).
The younger generation’s experience of Japan’s sluggish economy has been identified as the most likely cause for their valuing perceived stability. This is in spite of the fact that searching for new opportunities often makes available potential pay increases. Richard King, a senior recruiter in Tokyo, compared this with the same age group in China, where young people “have not seen any form of downturn or recession.” As a result “you’ve got a fearless employee base [in China] who can see that if a job they move to doesn’t work out, there are lots of other opportunities out there.”
However, the International Monetary Fund have said that low worker mobility and the preference for job security in Japan are big obstacles to wage increases, which are central to the Bank of Japan’s attempts to stoke inflation and growth in the country’s economy.
In his article The decline in job-to-job flows, Henry R. Hyatt suggests that so-called job-to-job flows are part of efficiency-enhancing resource reallocation for economies, allowing productive employers to expand, and less productive ones to contract.
He suggests that although job switches may involve costs as well as benefits, “because most job-to-job flows are voluntary movements many such flows are unambiguously positive for workers. Furthermore, the fact that workers switch jobs means that firms have a larger pool of potential employees from which to recruit workers: they are not limited to people without jobs but may recruit workers at other firms.”
Find related articles from the IZA World of Labor on the impacts of recession on young people here.