Received this this morning from Terrie Lloyd. Very much worth reading, as it shows the damage done by the market aberration (if you believe in free markets as the final arbiter of fairness) of holding labor costs artificially low — you get resistance to ever raising them again once business gets used to those costs as being “normal”. As wages and working conditions in Japan continue their race to the bottom, it seems that two decades of NJ “Trainee” near-slave and slave labor will come back to haunt the Japanese economy after all.
Terrie Lloyd: According to an article in the Japan Times on Thursday, quoting numbers from a Labor Ministry report released earlier in the week, there are now 2.02m people in Japan receiving welfare checks, more than any time since 1952. “Welfare” in Japan is apparently defined as financial assistance offered by the government to a household when its total income falls below the national minimum.
Presumably a big contributor to this record number of needy people has been the Great East Japan earthquake in March. The level of joblessness has soared to around 90% of employable survivors in the worst hit areas, and by the end of May about 110,000 were out of work and applying for the dole at various Hello Work offices in Iwate, Miyagi, and Fukushima prefectures.
So, one would think that with this excess capacity of workers, many of whom are from the agricultural, fisheries, and manufacturing industries, juxtaposed with the phenomenon of disappearing Chinese trainee workers from factories around the same regions, less than half of whom are yet to return, that there would be a slew of local hirings to make up the shortfall. Certainly after the Chinese trainees fled the disaster areas, there were plenty of news reports of employers grumpily saying, “We can’t trust Chinese employees, next time we’ll hire locals.”
But are they following through with local hiring offers? Our guess is “not”.
The reason is because a Japanese breadwinner from Iwate on unemployment, or even welfare, can still receive 2-5 times more than the Chinese trainees do for the same jobs. The factory and farm operators may grizzle about their “unreliable” Chinese employees, but without this source of ultra-cheap labor, they have no way of being able to compete with the flood of goods and produce coming in from China itself. The fact is that thousands of small companies all over Japan are addicted to cheap trainee labor from China and elsewhere, and to go local they would soon go out of business….